When you see that product on the store shelves, that is the result of a chain starting with the manufacturer. Many manufacturers don’t sell directly to the stores. This is because it distracts them from the duty of delivering a quality product.
Retailers buy their suppliers from wholesale distributors who act as the bridge between them and manufacturers. If you do it right, breaking into wholesaling can be very profitable. Here are some tips that should help you out a bit.
Break Into the Market
When you are planning to become a wholesaler, there are only three options available. You can start on your own, buy a ready-made distributor, or invest in one. The easiest of the three is purchasing the business. This ensures that you already have a market share and that you only need to do some tweaking to perfect your distribution.
The most difficult is starting from scratch. If you choose that route, you will be doing large amounts of hard work so that you can be competitive. It is also very risky since it can quite easily fail.
Have Proper Transportation
One of the essential things that you need to have is proper transportation for your deliveries. This can be difficult if you are extending your reach worldwide. For example, road freight transport here in Europe and other regions is not exactly simple to arrange.
This is why many wholesalers partner up with freight services to get their products where they need to be. If you plan to reach more retailers, look around for shipping partners that are dependable and can get your deliveries where they need to go with minimal fuss.
The Price Has to Be Right
If you want to be a success, you need to price the products you sell right. This is pretty important since this will determine who will be buying from you. Note that you will be buying wholesale and direct from the manufacturer. The price is much cheaper for you.
Your profits come from selling at a higher price to retailers, and then the retailers get their profit from selling to the end customer. One aspect that you will have to keep in mind that it is best to provide bulk discounts and minimum orders.
For example, if you sell at $10 each at 100 units, you can afford to go down to $8 when you sell at 500 units. You will never sell below 100 units to ensure that you have a decent profit. This will take a bit of math, so work with manufacturers and retailers to get the price that benefits everyone.
Find the Right Partners
Since you are a business to business company, which means you are the middleman between two firms, it would benefit you if you know both ends of the supply chain. You will want manufacturers who can deliver products at a reasonable price that you can profit from.
You will also want them to be able to provide products on time. On the other end, you will also need retailers who buy regularly and can pay on time. This provides you with a good revenue flow.
Being a wholesaler makes you an essential part of the supply chain that supplies the consumer. If you do it right, you can potentially be earning large amounts of money. This is where the tips above can be a big help. Keep them in mind to ensure that your wholesale operation becomes a success.