Wholesaling can be highly profitable once a business is up and running with a reliable supply and steady demand from customers. To be a good wholesaler one needs to have the ability to focus and problem solve, think and act quickly, and be service-orientated. With these qualities present, starting a successful wholesaling business is not that difficult.
Step One: Choose which products or industry you’d like to service. Many people become wholesalers because they are knowledgeable about a certain good or material or have contacts within a particular category. If no particular specialty exists, choose a product that has some traction in the market, but has not yet matured.
Step Two: Decide on wholesale model. There are two primary choices here: stocking goods or drop shipping. Stocking requires warehousing and then reshipment to customers. With drop shipping, one arranges for the goods or materials to be shipped directly to clients. Drop shipping has fewer upfront capital requirements, but in cases where some assembly or quality checks must occur, this may not be an option.
Step Three: Locate suppliers. The internet has transformed the wholesaling business and there are many sites, both general and specific, that match suppliers and wholesalers. These are good for initial research, but it is important to speak in detail to potential suppliers to ensure they can deliver.
Step Four: Negotiate shipping arrangements. Even if you plan to drop ship, it pays to investigate the most efficient and low cost shipping you can. These expenses cut into profit so it is well-worth looking to get the best deal.
Step Five: Build a web presence. A website is crucial in today’s business world and wholesale businesses in particular need to have a place online where customers can learn about the products and in many cases order directly. It is a good idea to review other wholesale websites from the same or similar categories to get a sense of content and functionality requirements.
Step Six: Get out and sell: Wholesaling is about selling. A good wholesaler is always looking for buyers of their products or materials. Having a website is important, but it alone will not magically produce business. One cannot be shy about reaching out to potential customers and selling the benefits of a business relationship.
Step Seven: Marketing and promotion. In addition to direct selling, look to find places to advertise and promote your business and product. Join applicable associations and trade groups, and develop your networking skills. Often the most lucrative deals come from chance meetings and opportunities.
This last step is crucial. Don’t miss out on any opportunity to make a connection. Wholesaling is all about connections and trying to be a step ahead. Being successful as a wholesaler requires drive and determination. The benefits can be great if you put in the work.