3 Things You Should Know Before Starting Your Own Wholesale Business
As a small business owner, you are uncomfortably aware of the difficulties associated with expanding your brand awareness, building a loyal and repeat customer base, and varying order size, regularity, and even price fluctuations between individual customers. Whether your business operates as a reseller or an original producer, selling wholesale can boost your revenues — both in consistent monthly income and in terms of future financial growth. Many wholesale businesses operate purely as a pit stop for production lines on their way to the most popular store shelves America, appearing in Walmart, Hollister, or CVS.
Consistency over time
To many, this may seem counterintuitive: Doesn’t selling wholesale mean you are cutting into your profits? In a sense, yes — wholesale product movement requires a lower selling point — however, by transitioning into the wholesale business or adding that segment to your selling strategy you will still be selling above your acquisition price. As well, wholesale purchasing orders are for hundreds or thousands of units, and retail customers are consistent repeat buyers. Direct consumers often represent inconsistent and small batch buyers, which can wreak havoc on your financial planning abilities. As a direct seller, you may sell 100 units one month and only six the next, wholesale deals are far more consistent long term, sometimes even occurring over a contracted period of time. This will spark life in your business plan and help you expand your presence.
Sourcing your product line
Wholesale resellers have a distinct advantage over traditional production outfits, from procuring Amazon pallets to buying direct from factories. Buying pallets from Amazon in particular can be an excellent product source and is a must for success in this line of work for new entrants and experienced product movers alike. These are pallets of returned items that Amazon works to offload through another channel. About 30 percent of all merchandise that Amazon sells is returned for one reason or another — Amazon is often famously chided by consumers and news outlets alike for some of its return policy practices — and a common outlet for those returns is to sell that returned product as a packaged unit to wholesalers at a steep discounted bargain rate. Often, you can find these deals with detailed descriptions of the inventory — as a point of note here, it is incredibly important to only source Amazon returns merchandise from outlets that provide detailed manifest listings of the inclusions and their condition.
Alternatively, wholesalers can source some of their product offerings directly from the factory. This can net healthy profits and is often a step taken by the ownership of a factory floor. Wholesale distributors are a critical resource in the sales process because factory workers are specialized in product creation, but not in the sales or distribution process that comes afterward. Wholesale resellers supply the factories with a valuable commodity — the customer.
Expanding your expertise
Today’s marketplace is full of fly by night operations, and these sellers tend to represent a flash in the pan. The real players in the wholesale market are those who have taken the time to learn the ropes. It may seem like a waste of time, but adding to your education can be a valuable resource for those seeking an edge in what has come to be a highly competitive market. There are a whole host of accredited online and continuing education degree programs that you can tackle in your spare time and will augment your toolbelt in order to round out your business instincts.
Wholesale reselling is a lucrative marketplace for those with guts and an eye for a deal. It can serve to be your ticket to fortune if you take your time to learn the ropes and jump in fully committed to success.
