Starting up a wholesale business can seem like an extremely profitable venture. Buying products in bulk for cheap before selling on at a significant amount more to retailers and other businesses makes it seem like an easy path to riches.
There?s more to it than that though and with lots of wholesale businesses already operating in many sectors entering the market doesn?t always deliver guaranteed success. In order to increase the chances of your new wholesale company making it, there are a few key elements to think about and put into action.
Choose Your Industry Carefully
There are already countless wholesale businesses working in many different sectors and as with any new company it?s important to find a gap in the market for yours. If you already have a lot of experience in one industry then this can provide a helpful start with any contacts and knowledge you possess.
Businesses are less trusting in the wholesale industry of new suppliers, especially when they already have established and reliable distributors. Breaking in can therefore be very challenging unless you employ a good team with plenty of existing contacts or find a sector with few or many unreliable wholesale distributors.
Know Your Role
It?s important to know exactly what your wholesale business? role is to help it develop and grow in the right direction. Most have their own warehouses for accepting products from the manufacturer while others ship directly to the retailers or other businesses, saving on costs.
Decide which method is appropriate for the industry you?re working in for the most efficient process. This will impact on whether you ?take title? of goods, accepting legal ownership and the risks which come with that. It is more likely if you keep items in your own premises rather than shipping direct.
Use Financial Support
Especially in the early stages of your company it can be advisable to make the most of certain financial services available. There can be large delays in receiving payment for many orders in every wholesale sector which can cause cash flow problems.
Using invoice factoring through Touch Financial allows advance payment so you can gain access to enough funds to continue running and growing your business. Without this you may not be able to order or pay for bulk orders at the start, leaving you with not enough products to sell on.