{"id":1106,"date":"2020-03-15T11:30:00","date_gmt":"2020-03-15T11:30:00","guid":{"rendered":"https:\/\/au.contrado.com\/blog\/?p=1106"},"modified":"2020-09-01T14:50:40","modified_gmt":"2020-09-01T14:50:40","slug":"things-to-know-before-starting-wholesale-business","status":"publish","type":"post","link":"https:\/\/au.contrado.com\/blog\/things-to-know-before-starting-wholesale-business\/","title":{"rendered":"11 Important Things To Know Before Starting A Wholesale Business"},"content":{"rendered":"\n

So, you have your great idea. The one. The plan that will make you your millions. Now what? How do you get started? What should you be aware of? What do you need to look out for? It can be a daunting time trying to turn your dreams into a reality, so we\u2019ve pulled together this handy guide of important things that you should know before you start your wholesale business for you to learn the ropes.<\/p>\n\n\n\n

1. What is Wholesale?<\/h2>\n\n\n\n

Wholesale is buying a large amount of something and then selling it on. There are lots of ways that wholesale can be incorporated into a supply chain but put simply, wholesale is basically bulk buying. Often, because goods are bought in large quantities, the price per unit is much less, which is how wholesale business become profitable.<\/p>\n\n\n\n

2. What is the Workflow of Wholesale Business?<\/h2>\n\n\n\n

It\u2019s a broad umbrella as you can buy wholesale and sell to another business \u2013 which would make you a distributor \u2013 of you can sell it on directly to your customers, which would make you a reseller. You could buy wholesale directly from a manufacturer or from a distributor. For the purpose of the rest of this guide we will mostly focus on what you need to know when your end goal is to sell to customers, that is, you become the retailer.<\/p>\n\n\n\n

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3. You Need to Know Your Market<\/h2>\n\n\n\n

This is arguably the best place to start, but it is also the most commonly missed step. It\u2019s all well and good knowing what you want to sell, and how much you want to make. But that might not be realistic. Check out what your competitors are offering. Is it all brand names? Is it all in one particular colourway? Could that be because it\u2019s easier to produce or is that just where the demand is? What are they charging? Most importantly, what can you offer that they simply don\u2019t? If you can then this is a great place to try and work out what sells well and what doesn\u2019t, see what they are offering in their clearance range \u2013 chances are that it didn\u2019t do as well as they were hoping.<\/p>\n\n\n\n

Trade shows are like little hidden gems. You can often find a wholesaler there to purchase from, and you can usually compare a few as they\u2019ll flock there, all with their shiny proposals to try and bring retailers on board.<\/p>\n\n\n\n

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4. Your Supplier Matters<\/h2>\n\n\n\n

Choosing your supplier is a multi-part process within itself. There are so many new terms which you are likely to run into, and there are multiple things to consider when choosing your own wholesale supplier. You need to consider where they are, in proximity to you. Perhaps, less so where they are than how easy, how quick and how inexpensive it will be for them to ship the stock to you. Another thing to consider is quality. You want to be offering high-quality goods to your customers, which means that they need to be offering high-quality good to you. Do they have minimum orders? What are their prices, what do their discounts look like?<\/p>\n\n\n\n

It\u2019s a task within itself choosing your supplier. One of the benefits to wholesale however is that you don\u2019t necessarily have to order everything from one place. You might find that company A is perfect for everything, but they just don\u2019t stock that one particular product that you want to offer. Well, that\u2019s not a problem, because you can order that specific product from company B instead. If you\u2019re super lucky, you might find a company C that stocks everything that you\u2019re looking for. But, if you don\u2019t, then there is no need to stress, as ultimately you hold all of your stock, so you can get it from as many places as you need to. Which brings us nicely onto\u2026<\/p>\n\n\n\n

5. You\u2019ll Need Storage for Your Wholesale Business<\/h2>\n\n\n\n

With the wholesale business model, you\u2019ll be holding your own stock. This leaves one burning question, where are you going to put it all? Now, the space that you need is going to depend massively on what it is that you intend to be selling. If you\u2019re looking at jewellery and keyrings, then you\u2019re going to need less space than you would if you were selling furniture.<\/p>\n\n\n\n

Whatever it is that you\u2019re selling, you need to work out exactly how much space you\u2019re going to need, and where that space will be. When you start your wholesale business, you\u2019re likely not going to go in all guns blazing, you\u2019ll start a little smaller and build yourself up. It\u2019s worth at this point considering scaling and having some kind of plan of action in mind.<\/p>\n\n\n\n

Consider where you will be selling your products? Do you intend to open bricks and mortar stores? Are you going to visit craft fairs and boot sales? Is your ultimate goal to be an online retailer? Perhaps even a mix of all three? This will also have some influence on where you\u2019ll hold your stock, as well as how much of it you\u2019ll need.<\/p>\n\n\n\n

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6. Your Pricing Should be Reflective and Fair<\/h2>\n\n\n\n

Pricing \u2013 the big one. This is often a careful balancing act. You want to be competitive, but you also want to make money. The supplier that you have chosen will affect your pricing, on multiple levels. You need to mark up the wholesale price that you have bought your products at. One of the benefits of wholesale buying is that you often get discounts, usually based on the quantities that you buy.<\/p>\n\n\n\n

However, you also want to make sure that you\u2019re offering quality goods. If you\u2019re offering \u00a310 t-shirts, then people are likely going to consider how long it\u2019s going to last \u2013 will it even make it through the first wash? Also, for you to be able to sell for that, means that you bought it for less than that. What were the working conditions of the person that made it? But if you offer that same quality t-shirt for triple the price, then people are going to notice \u2013 and they\u2019ll feel like they\u2019ve been ripped off.<\/p>\n\n\n\n

Ultimately, you need to set your prices at a level which reflects the quality of the product, makes you a profit and is fair. Pretty simple.<\/p>\n\n\n\n

7. You Need to Consider Shipping<\/h2>\n\n\n\n

Well, you\u2019ve already worked out how the stock is going to get from your wholesale supplier to you. The next challenge is working out how you\u2019re going to get your products to your customers. There are multiple different options out there and you need to see which is going to work out the best option for you. Just as we said with suppliers, remember that you don\u2019t necessarily need to choose one postal service to ship everything that you sell. You also need to work out if you will charge your customers for the postage or if you intend to offer free delivery. If you\u2019re offering free delivery, then you\u2019ll need to absorb that cost somewhere.<\/p>\n\n\n\n

Consider a number of things when researching this. A lot of postage costs are based on weight, but that\u2019s not always the case. Size also plays a huge part in the postage cost equation. If you think of large stuffed toys, for example, they are pretty lightweight all things considered. But you won\u2019t get as many of these on a lorry as you would terracotta flowerpots because they take up more space. You also need to consider where you want to ship to. Again, some services will specialise in overseas deliveries. You\u2019ll need to weigh up cost, speed and quality of service when choosing your courier. <\/p>\n\n\n\n

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8. There are So Many Types of Payment<\/h2>\n\n\n\n

You need to consider how your customers are going to pay you. When you start your wholesale business, you\u2019ll have some kind of idea of how you intend to carry out your sales. If you\u2019ve got a store, then you\u2019ll probably need to look into cash and card payments. There are many options out there, from portable iZettle style systems (great if you intend to take to craft fairs and events) to PDQ machines that are a little more fixed to just the store.<\/p>\n\n\n\n

If you\u2019re thinking that you will more likely be running your business online, then you\u2019ll need to consider your payment options here. Bank transfers, card payments or even credit plans are worth looking into and doing your research on. There are so many providers out there that offer so many things. Perhaps the most popular is PayPal.<\/p>\n\n\n\n

Bear in mind though, that these too, are businesses, and there will likely be a charge for the service. Some of these charges are worked out on a cost-per-transaction basis, some as a subscription and some are done on a percentage. Explore all your options and work out what is most likely to suit you.<\/p>\n\n\n\n

9. Customer Service Really, Truly Matters<\/h2>\n\n\n\n

When you start your wholesale business, you\u2019re not just a store, you\u2019re a service. People aren\u2019t just buying a product from you, they are buying a promise that the product will arrive on time, as described and that it will do what it is meant to. In a perfect world, everything will all go smoothly, and it will be a seamless transaction. But it\u2019s not a perfect world.<\/p>\n\n\n\n

That being said, with the right supplier, right courier service and seamless planning, more often than not things will go swimmingly \u2013 most of the time. What you need to do is make sure that on the odd occasion where it doesn\u2019t, that you look after your customers. Otherwise, the moment there is flooding, and the delivery can\u2019t make it, or your supplier is out of stock of a specific item, your customers will start to stray.<\/p>\n\n\n\n

Think about your returns policy. Make sure that you manage your stock levels, and that you inform your customers if something becomes unavailable. Stay up to date with your couriers, especially around bouts of poor weather or the holiday season. These things happen, and that can\u2019t be helped. What can be helped, however, is how prepared for it you are, and how you deal with it.<\/p>\n\n\n\n

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10. There Are Both Pros and Cons of Wholesale Business<\/h2>\n\n\n\n

Pros<\/strong><\/p>\n\n\n\n