Wholesale business is a challenge that not many people accept. It is similar to running an entire company single-handedly. Still, it is a highly viable option for people who want to get into wholesale distribution or wholesale business of any nature. In this article, let's look at the best business tips for running a wholesale business.
What is a Wholesale Business?
The wholesale business is where you buy large quantities of goods from manufacturers for sellers and sell them in smaller quantities to retailers, subsequently selling them to customers. However, it does not mean that if you are a wholesaler, you cannot sell the products directly to customers. Popular examples of wholesale businesses are textile, non-dairy beauty products, agrochemicals, stationery, kitchen utensils, electrical appliances, children's toys, garments etc.
Best Business Tips for Wholesale Business Owners
Running a wholesale business is not easy, and no matter whichever product you choose to sell, there are several challenges at every level. If you want to know how to grow your business as a wholesaler, here are some of the best business growth tips proven to be very effective. So let's take a look at the best business tips on how to grow business as a wholesaler.
1. Find a good supplier.
Choose a reliable supplier, as this is a relationship that will lay the foundation of the wholesale business. Search through different channels and dimensions to wisely select a good and efficient supplier. Invest effort and time in building a long-lasting relationship with a prospective supplier as this could set the tone for the future when you are wondering how to expand business as a wholesaler. Do not filter suppliers based only on the price of the products but also on their overall service, communication channels, and efficiency.
2. Replace Manual work
Studies have shown that a lot of inefficiencies creep up in businesses when the orders are handwritten. Many wholesale distributors still end up taking orders on paper forms or on excel /PDF worksheets that are quite unmanageable as the workload increases. So as a wholesale business owner, invest in a good ERP software that can automate many processes like billing, inventory, account management etc. This can be very scalable and efficient for the business owner. ERP software can be customised as per the requirements and is efficient in handling heavy data loads. There is plenty of good quality ERP software in the market to choose from. Choose wisely based on the nature of the business and the other parameters that you require to be automated.
3. Online presence
In the age of social media, every business must have an online presence, either as a website or social media or perhaps a mobile application. Social media marketing can promise a lot of accessibility to prospective customers or retailers. It can open up an avenue of possibilities in bringing distant suppliers, marketers, retailers or even customers. This tip may or may not bring in sales, as there has not been enough proof on it yet, but it is one of the effective business tips on expanding the business wholesale.
4. Train your sales reps
With a lot of information available and technology at hand, the expectations from a sales representative have also gone up. As a wholesale business owner, invest in training your sales team to engage in conversations to attract more buyers and customers. Provide them with enough data, and build creative strategies to forge a rapport with their prospective buyers. Digital catalogues and product videos can be helpful for sales reps to amp up their ability to sell instead of memorising everything manually.
5. Prioritise customer service
Concentrate on how you can provide an excellent and seamless service to your customers instead of just bringing on more sales. Taking a couple of steps backwards for long term results can go a long way in setting up the trust for customers. In a wholesale business, customer relationships are the core, and if you are pondering on how to grow your business, this is one area that you must never lose focus on.
6. Invest in eCommerce application
With the ability to order almost everything online, consumers now expect to have product stocks available 24x7. It is important to integrate an eCommerce application into the system for this trade of products. Businesses that can bring in a multi-channel integration in their systems to keep their products saleable to all kinds of retailers will benefit in the long run.
7. Automate service delivery
It has been observed that 68% of consumers could receive orders in the back office within 24 hours. Shipping too has been reported to be done in less than 24 hours as soon as it has been received in the back office. This is a benchmark for the industry, and wholesale distributors can grow their business by ensuring a seamless delivery process in place for the end customer. If you're still wondering how to grow my business in the wholesale sector, go digital.
8. Customer relationships
Last but not least, any business can successfully thrive in the market when it has a loyal customer base and strong customer relationships. Prioritise on the customer service you offer rather than procuring cost-effective products. Taking a few steps back for a long term result can go a long way in establishing a rooted and successful outcome for wholesale business owners. Proactive conversations about products, prioritising order delivery, and engaging sales conversations are effective ways to build long-lasting customer relationships. This is one of the best business tips for wholesale business owners on how to expand the business.
Traditionally wholesale business was always thought of as a cumbersome business proposition, as it required a lot of manual work. It was usually managed through some back office or a storage place where you count on your long term consumers for sales. However, the advent of technology has opened a lot of possibilities for wholesale distributors to amp up their business game to the next level. They can leverage on technology to get more buyers, increase their sales, promote their products, the possibilities are endless. There are tonnes of challenges too in running a wholesale business. It is like running a one man show -- running an administration single-handedly and managing all departments with equal efficiency. However, if you follow these business growth tips and try bringing in automation to most of the processes, it will help you to expand your business by leaps and bounds.
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Q. What are some of the challenges you face while running a wholesale business?
Ans. Inventory management, e-commerce integration, customer demands, and disintermediation are key challenges that one can face while running a wholesale business.
Q. What are some good e-commerce features for wholesale business owners?
Ans. Simple design, multi budget options, easy reorder process, barcode scanners, mobile-friendly, end-to-end shopping cart experience are some of the e-commerce features that the wholesale business owners may look into.
Q. What are the average profit margins for wholesale business owners?
Ans. However, profit margins largely depend on the product. An average profit margin for a wholesale business owner could be anywhere between 3-30%.
Q. What is dropshipping?
Ans. Manufacturers directly try to interact with consumers to make sales of their products by eliminating any middlemen. So for a consumer, when they buy from a dropshipper, they are being approached directly by a manufacturer instead of a wholesaler.
Q. How can you eliminate disintermediation in the wholesale business?
Ans. Manufacturers and retailers are trying to directly sell to the consumer eliminating the distributors from the equation. However, they do have the challenge of delivering on time, which a wholesale distributor can effectively manage. This way, the consumer or retailer would still prefer connecting with a distributor even though they can buy directly from the manufacturer.