Are you thinking about getting into selling products to other big retailers? Wholesale business can be a mixed bag. Nevertheless, why would you sell your products at a lower price that its value?
Getting into wholesale business can be profiting if you play it right. This guide will help you to understand what is required to be a wholesale distributor.
Benefits of Being a Wholesale Distributor
- Selling in Bulk
In wholesale business, you sell in bulk to different businesses rather than single products. This means that a single business order is large.
Instead of selling only a few items to end-customers like in B2C sales, you would sell your products in quantities many times that of B2C sales orders.
- Consistent Income
The benefit of being a wholesale distributor is that that as compared to consumers, businesses change their purchasing preferences less. If your buyers realize that the last product was selling more, they will be frequent customers to you.
Therefore, your business will receive more income consistently. Large wholesalers and retailers may work to help you enhance your products and increase the profit margin.
- Increase Brand Awareness
Shelf space that is created by other retailers helps to increase brand awareness with consumers.
The more retailers your products are being sold to the great the exposure your business receives. When retailers purchase the products, they offer more discounts and promotions to get to more customers.
This increases awareness and exposure of having several retailers increase consumer demand, which pushes other retailers to purchase your products.
Tips to Be a Wholesale Distributor
- Decide What You Want to Sell
Do thorough market research to know what products you need to sell. You need to decide between two choices: paying attention to selling one product or selling a variety of products.
You can look for smaller retailers who need a wholesale supplier for their businesses. You can also look at potential brands that could make a name in the industry in the coming years. You need to conduct thorough market research because your choice of products could make or break a business.
- Identify Your Customers
When you settle on what you need to sell, start looking for the retailers and other wholesalers who could be your potential customers. With this list, you can rank them according to the volume of products they require.
You need to consider that some of these retailers would have their distributors. You need to prepare an irresistible strategy to stop them from rejecting your services. This includes offering discounts and initial offerings.
- Decide How You Want to Operate
Another important factor in deciding whether you want to carry out your business as a business-to-consumer (B2C) or business-to-business (B2B) distributor.
In the B2B business, you will be buying products at wholesale prices and then selling them to different retailers. The price you sell your wares for will be below retail pricing, but higher than your purchase price.
If you have money for initial investments and a means for product storage, this is a good choice because you can buy in bulk, which gives you the highest margins to play with.
You also have fewer customers to deal with than a retail business, and they’re all professionals, so your customer service needs are limited. In B2C efforts, you’ll be purchasing jewelry wholesale and selling it to the end-user, either through a store, at home parties, on a website, or using a third-party resource such as eBay.
If you’re selling entirely online, you can use a drop-shipping service, which means you’ll never have to see or touch the products.
- Authorizing Your Business
Before you start your business, you need to acquire the necessary licenses and permits. The most important legal paper you need in this case is a wholesale license.
This will allow you to act as a middleman and buy products wholesale from manufacturers without paying sales tax.
Also, you will need to contact the manufacturers and work out deals to distribute their products. Many times this begins with filling out an online application form on their website or contacting their local sales office.
- Getting Enough Inventory
Before you start selling, you need to find reliable suppliers. Mainly you need to find the suppliers who offer products at a reasonable price.
This is essential to you because it will help you know the type of business you are developing. Get to know the types of suppliers.
- Purchase a Warehouse and Start Operations
This will be your biggest expense and one that should be given due time and consideration.
You’ll want a warehouse that’s big enough to house all your stock, but also not so big that you end up paying for a lot of space that is never in use. You’ll also need to choose between buying and renting a place.
This, of course, comes down to how much capital you’re willing to invest in this venture. If you have the money for it, buying your warehouse is naturally the best possible scenario. There’s no monthly rent, you don’t need to worry about getting kicked out, and you have complete control over its security and usage.
- Take Charge of Your Pricing
Above everything, the cost and pricing should be affordable and tempting to retailers. Customers expect your products to be priced at least 50% lower than your regular retail prices.
Store owners need to make a profit too, and expenses pile up quickly when running a brick and mortar. If you want a store to keep ordering from you, give them a reason to be happy to work with you by making them money.
Again, make sure you are taking into account all of the expenses associated with producing your product so you can be sure to account for them when you are calculating the price.
Why not start your wholesale business now? You have been equipped with all the necessary information to be the next wholesale distributor.
If you want to become a wholesale jewelry distributor, Nihaojewelry should be your first step to getting the necessary information and quality products you will need for your work.