Running a wholesale business is by no means an easy task. While sometimes it can be hard to make profits, at other times, the business could be down because you did not meet your sales expectations. Whatever the causes may be, starting a wholesale business, and more importantly, keeping it operational and afloat is challenging indeed.
So, what makes a wholesale business stand out? If you want to get your business going and are looking for profitability, here’s what you should and shouldn’t be doing.
1. Don’t start without understanding the business first
One of the most common mistakes that wholesale business owners, especially the first-time ones, fail to understand the nuances. They assume that, unlike some other businesses, a wholesale business would be much easier to manage. They don’t realise that it is far from the truth.
Like any other business, you must put much thought and effort into starting a wholesale business. The first thing you must do to put your idea into action is to conduct a market survey—research how the competition is doing in terms of the products they offer and their prices.
Conducting a market survey also helps you understand what the business is like and how you will thrive. It will help you to price your products competitively and allow you to operate smoothly and efficiently.
2. Work with the right people
While it may be obvious, most businesses, including those in wholesale, fail because they don't hire the right people. So, as a part of the small business tips and advice, you should invest in founding your wholesale business and hiring the right people. Be sure to set a benchmark against which you can compare each candidate’s skills to avoid hiring the wrong one.
During the hiring process, don’t ask obvious questions to allow applicants to answer instantly. Make them think about how they can bring value to your business. You could also create a situation for them and see how they handle it. That way, you can assess their problem-solving skills to find out whether they have what it takes.
3. Don’t manage orders manually
Among the many challenges that wholesale business owners face, managing orders is the most prominent. While some businesses have shifted towards the digital form, taking orders with the help of spreadsheets and even PDF documents, they can also be equally challenging.
One of the best solutions for this would be to use mobile devices to take the order and share it among the sales representatives. The order may contain details about the customer and the product, and one of the sales representatives can note it down on their smartphone or tablet and share it with the others, making the process much easier.
4. Track your inventory
Your wholesale distribution business will be profitable only if you learn how to manage your inventory. Many companies have a system in place for tracking their inventory. Such methods often involve restocking the inventories once it reaches a set minimum level. Likewise, other businesses may choose to stock up specific items for safety purposes if there is a surge in demand.
To track your inventory, you could use any system, including counting your stocks and replenishing those in demand. Note that keeping track of and restocking your inventory is vital to managing it effectively.
5. Don’t differentiate your brand based on price
Suppose you are wondering how to grow your business and think that effectively pricing your products is the answer. So, you may need to reconsider as various factors come into play, including offering excellent customer service.
Most companies try to make their brands stand out based on their prices alone. By lowering the costs, they hope to increase sales volumes. While this may be a good strategy for some businesses, it certainly isn’t as effective for a wholesale business in the long run.
Instead, focus on offering a memorable experience for your customers regarding support and service. If you want your brand to stand out from the rest of the crowd, you should consider how you can offer your customers a modern and convenient experience and fulfill their demands better. Additionally, you should also think about how your products can bring value to them.
6. Invest in B2B e-commerce
Today, you find more customers ordering things they need through the online mode. If you want to know how to expand your business, invest in B2B e-commerce. There are various reasons for this, but the most important one is that customers can get what they want at any time since such online platforms are available 24/7.
You should also consider that if you are looking to invest in B2B e-commerce, you should implement your strategies across different channels rather than stick to one or two of them. Those businesses that have done this are already reaping huge profits.
The third aspect of investing in B2B e-commerce is to have a modern and attractive business website. Most businesses who have done this are catering to customer needs right from their websites. So, customers don’t need to go anywhere or wait in those long queues to get what they want.
7. Don’t forget to build a great relationship with your customers
No business can succeed without happy customers. So, you make sure that you build a good rapport with them so that they become loyal. One way to establish a solid relationship with your customers is to offer them a buying journey they will never forget. You can do this by helping them get what they want to provide them good customer support services.
For this, you must prioritise fulfilling their orders. If you can learn to do this, then you can rest assured that you will have hundreds of loyal customers for your wholesale business before you know it.
So, these are some dos and don’ts for small business owners. Try and follow them so that your wholesale business thrives.
The modern economy has lots to offer for wholesale business owners. So, you don’t need to worry about how to make your business grow. While there are several challenges to successfully running a small wholesale business, you can still overcome them by implementing the right marketing strategies. Remember that you can always depend on these strategies to help in the growth of your wholesale business.
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Q. What challenges does a wholesale business owner face?
Ans. There are seven challenges that a wholesale business owner must overcome. These challenges are:
- Customer service demands
- New marketing channels
- Challenges in shipping the products
- The risks involved in disintermediation
- Disorganised warehouses due to scaling
- Designing a modern website
- Effective inventory management
Q. What are the three key elements that help run a wholesale business?
Ans. The three key elements that go into making a wholesale business successful are:
- Effective credit management
- Obstacles in the supply chain
- Seeking sound advice, and more importantly, sticking to it
Q. What are the best wholesale businesses that you can start?
Ans. When it comes to wholesale businesses, you have many niches that you can try, including:
- Agrochemical business
- Textile business
- Jewellery business
- Furniture business
- Organic food business
- Ayurvedic products
- Stationery shop business
- Children’s toys business
Q. Are some wholesale distributorship products more profitable than others?
Ans. Yes, Some wholesale distributorship products and businesses are more profitable than others. Such companies may include:
- Agricultural commodities
- Bakery products
- Milk and dairy products
- Spices and edible oils
- Building and Construction
- Computer hardware and accessories
- Electrical and electronics items
- Engineering and industrial supplies
- Apparel and textiles
- Furniture and Interiors
- Herbal, beauty, and other healthcare products
Q. Do some wholesale companies need distributors?
Ans. Yes, Some wholesale businesses need distributors. These include:
- Apparel and fashion
- Business services
- Computer hardware and software
- Construction and real estate
- Consumer electronics
- Electrical supplies
- Energy and power
- Environment and pollution