Many people do not prefer to work a 9 to 5 job. Rather, they like to be their own boss. If you are one of those people and you plan to start a wholesale business, you should keep certain points in mind lest you fail in your venture.
Set Your Expectations
The simple things, such as failure to set goals usually lead to the failure of a venture. Therefore, the first task for setting up a wholesale business is to decide what you expect from it. Do you intend to become a big businessperson or would you be satisfied if your business just helped you earn a decent living to make both ends meet? Are you ready to devote full-time hours to your business or do you prefer something that requires less effort on your part? How much risk you are willing to take?
Decide Your Business Structure
Sole proprietorship and partnership are the two most common business structures followed by wholesalers. Both of them have pros and cons. Therefore, you should first develop comparable lists that include both of them, which will help you to make your decision. For instance, in sole proprietorship, you have the entire control over the business while in partnerships you do not. When you are the sole owner of the business, you are responsible for its every aspect but when you work in a partnership, you share the workload.
Decide Your Business
Depending upon the capital investment, your interests, risk-taking capacity and profits, you should decide what products you want to sell. For instance, if you have a keen interest in fabrics and you have a large capital to start your wholesale business, you could become a wholesaler of clothing.
Once you decide on your products, the next step is to decide where to sell them. Wholesalers have many options when it comes to selling their merchandise. You could set up an online wholesale shop, sell products in bulk on eBay and Amazon or open a brick and mortar store. Again, the decision should be based on the amount of capital you want to invest and the type of products you want to sell. If you cannot invest heavily, you should not think of a brick and mortar store. A good alternative to a brick and mortar store is selling your products online. Similarly, if you want to sell fresh foods, a brick and mortar store would be a better option.
Some wholesalers also offer dropshipping services. In dropshipping, instead of buying products from wholesalers, retailers just take the orders from customers and then forward them to wholesalers. The wholesalers process the orders and send them to customers. Though dropshipping could be profitable, it requires more effort to offer dropship services.
Know The Rules
You should gather information about the laws of your state for starting your business. This will help you know what licenses you need and what the sales tax implications are for your wholesale business.