How Do I Become a Wholesaler?

Moving up the sales food chain is easier than you think. But you should familiarize yourself with the logistics before you take a leap.

Wholesaling has a number of advantages over retailing. Bulk rates mean that you can get more for less. Bulk sales means fewer casual customers and more long-term relationships. Wholesalers are also further up the sales food chain and might have more intimate relationships with their distributors. No matter what your reasons for wanting to become a wholesaler there are some things you should know that will help you get into the world of distribution.

What Is Wholesaling?

In the years before the internet companies operated retail stores for the public. To get their goods they had to purchase stock from wholesalers. The wholesaler acted as a middle man between the manufacturer and the retailer. This is still true in the Internet age, however the lines are not so clear as they used to be. Now there are scores of places online that sell wholesale direct to the public. Still, there are a number of manufacturers who will not sell goods directly to the public. Whether you want to be a wholesaler to retailers or a wholesaler who acts as a discount retailer, the procedures for setting up your business are largely the same.

What Is Drop Shipping?

One type of wholesaling and distribution method of the internet age is "drop shipping". This is when a retailer keeps no physical inventory on hand. Rather, the retailer sends a notice to the wholesaler letting him know that a customer has placed an order for a specific item or items. The wholesaler then ships the order directly to the customer.

Selecting a Market

The first thing you must do in your career as a wholesaler is figure out what you goods you want to sell. Figuring out what product to sell is largely a function of examining your knowledge base. What products and markets do you have experience with? You must choose products that you can thoroughly and competently explain to your customers. Wholesalers must necessarily have far more knowledge of a product than a retailer and be on hand for any questions and concerns that a retailer might have.

Check Manufacturer Requirements

When you have decided what type of products you want to sell you will have to check in with the manufacturer and see if you meet their wholesaler requirements. Sometimes the requirements are very minor and mere formalities. Other times requirements are more rigorous and inflexible, such as a certain number of years in the industry or professional degrees. If you do not meet a manufacturer’s requirements you will have to look into other places to get your supplies from.

Other Features To Look For

In addition to having the supplies you want and meeting their requirements, there are other things to look for when searching out the perfect manufacturer to work with. In particular, you want to look for any perks that the manufacturer may offer. A common perk offered to wholesales are training programs and around-the-clock customer service.

Terms and Conditions

Familiarizing yourself with terms and conditions of the wholesaler is very important. This contains all the most important information on your deal with the manufacturer. Before you sign it there are some things to consider:

  • Buy rate: Your buy rate must be low enough for you to be competitive in a broader market.
  • Exclusive agreements: Have you signed an agreement that prevents you from selling similar products manufactured by competitors?
  • Expectations: The terms and conditions will include all the information about what you can expect from the manufacturer -- and what the manufacturer will expect from you.

Becoming a Wholesaler

Moving into wholesaling is moving up in the world of sales. If you have experience and knowledge of a product far beyond that of other retailers, it is worth looking into whether or not you are qualify to be a wholesaler. This will allow you to potentially have a better profit margin on the same items you are already selling.