How to Start a Wholesale Distribution Business

by Josh Biggs in Business, Startup on 27th July 2021

Wanting to start a business is everyone’s dream these days. While a lot of people are coming up with some pretty innovative ideas for their business, a good old Wholesale Distribution Business is still firmly holding its place in the ever-changing business world. This wholesale distribution business was in place right from the beginning of civilization where a barter system of trading was in place. From then, till now, Wholesale businesses have always been in demand. So if you are thinking of starting a Wholesale Distribution business, let’s help you get there. In this article, you will learn about all that there is to start a wholesale distribution business and a few useful tips here and there. But first, you need to understand what wholesale distribution is. 

What is Wholesale distribution?

Wholesale distribution acts as a mediator between the manufacturer and the retailer. Let’s think of any product, there is a manufacturer who makes the product and a retailer that the people buy it from. Wholesale distributors are in the middle of these two in the supply chain. Wholesale distributors buy goods from the manufacturer and sell them to the retailers and make a profit out of the transaction or the trade. 

But unlike other business ideas, the costs and risks associated with this business startup depend on the product(s) you choose. Stick until the end of the article for more information on how to start this business and what are the important steps of the process.

Finding the product(s)

After you decide on starting the business of wholesale distribution, one of the first things you need to do is find yourself a product with which you choose to do the business. This product can be anything that picks your interest. While selecting the product(s) you should make sure that you choose the one which is unique and in demand or you can also choose something regular with some added twists which makes it unique. You need not focus on a single product, if you can manage them well you can choose to do business with multiple products as you wish. Make sure you get your products from a reliable supplier so that you can show your retailers that your business is trustworthy.

Come up with a Business plan

Coming up with a business plan includes deciding what you should do right from choosing products to getting wholesale distributor insurance and many more that follows. You also need to decide on which type of distributor you want to be. There are two common types of wholesale distributors, one who keeps the inventory of products with them and the other who works by dropshipping. Depending on which type of distributor you choose to be you have to formulate a business plan that falls in line with that.

Analyse the Costs

Every business small or big needs some investment to begin with. And especially the wholesale distributors need to spend a lot of money first hand and reap the benefits later on as the business expands. One thing you should most certainly take into consideration is the costs that are associated with your business. You need to figure out how much money you have to spend initially and save up for it. You can also apply for a startup grant if you are eligible. But make sure that the estimates you make are as accurate as possible.

Be thorough with the Legal work

Since you are starting a business you need a name for your business and you need to register your business name at your local business office and get any patents or copyrights ready before you announce your startup to the public. Get a business license and business bank account. If you are starting a business for the first time, you can also take the help of a lawyer so that they can help you complete all the procedures without leaving any and also you can complete things by the book.

Find a place

Since you want to start a distribution business, you need a place for the inventory. How big that place is should depend on what product you choose to distribute. The money you spend on the inventory also depends on your product. Let’s say your product is a necktie, then you can simply run your business from your home itself, you just need to spare one room for the inventory. But if you choose a  product which needs a bigger place and maintenance then the costs would be more. But initially, when you are just starting out you can operate from your home itself and eventually, as the business grows, you can shift your inventory to bigger places like warehouses.

Find a supplier for your products

The next thing you need to do is find a reliable supplier for your products. You can either contact the manufacturer directly and buy your products from them or you can buy them through some suppliers who are selling wholesale products at better prices. You can also get your supply of products online. There are a few websites like Alibaba, Etsy, Thewholesaleforums etc. that sell the products wholesale. You need to make sure that the products are authentic and your supplier is transparent with you about the products, which the retailers you sell to would expect from you. Finding a reliable and credible supplier will help you in running your business smoothly. Once you find a supplier/manufacturer that you can buy from, go ahead place your order and stack them up in your inventory.

Start your Business

Since you have a business ready to begin at your hands, you can go ahead and start your business. But before you do that you need to find a retailer that is ready to buy your products. And like any other business, your business too needs advertising. Start by printing and giving away pamphlets, sending catalogues of your business to your potential clients. You also need to create a website for your business, which is gonna be your face online and is gonna be a lot of help for you as your business grows. Once you find your clients go ahead and start doing business with them. 

In Conclusion

You might be very excited about the business you are gonna start. If everything works out that might as well take you to places. Being cautious through every step of your business and avoiding errors is the key to the success of your business. You also need to decide on how and from where you are gonna operate, through a store or online, whatever your medium is, make sure that the word reaches around so that you can get more clients. While you are at it, make some connections in the sector which will be a lot more helpful in the coming days for the development and expansion of your business. 

Categories: Business Startup