How to Run a Wholesale Business: 8 Factors to Consider

Nicole Georgiev
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    Are you interested in opening a business? The wholesale industry is a great place to start. Refresh your memory about wholesale definition before diving into how to run a wholesale business. This way, you’re setting yourself up for success. 

    Wholesalers focus on selling wholesale items to other companies to make a profit. However, starting this business will require you to write a business plan, and financial planning, and look into how to find wholesalers, source items, and warehousing. It's also important to differentiate how to run a wholesale distribution business.

    For your wholesale business to thrive, you have to keep current market demands and industry trends in mind. These include food trends, such as fresh produce and beverage trends, supply chain management trends, eCommerce trends, wholesale food distribution trends, and DTC trends. By following these trends, you’ll know what your niche market is interested in and which wholesale items to sell.

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    What Are Wholesale Businesses?

    Wholesale businesses are companies that offer products in large quantities. These enterprises often specialize in selling a single product category. However, there are also wholesale businesses that sell all kinds of products. They’re referred to as broadline distributors. Wholesale businesses are usually focused on B2B sales. Here are the reasons why other companies purchase goods from them:

    • Wholesale prices are lower compared to retail;
    • Buying from wholesale businesses and selling to retail customers is a proven business model;
    • Working with wholesale businesses is more convenient as they offer a wide range of products.

    Some individuals might also purchase goods from wholesalers. Distributors often have high minimum order quantities (MOQ) that can be too large for single households or individuals.

    How to Start a Wholesale Business?

    Are you interested in starting your own wholesale business? In that case, here are the main steps you need to take in order to achieve this.

    1. Choose the wholesale items to sell. If you have a limited capital, starting small is better. You can opt for offering a single category of products and gradually expanding it.
    2. Research the competition and the market. Doing proper market research is crucial for starting a wholesale business. You need to see the trends and the demand for products you plan to sell. Also, research the supplies of these products. Some niches might be very competitive while others might have gaps that can be exploited.
    3. Find manufacturers and producers. It doesn’t matter if you’re planning to start a wholesale coffee distribution business or to become a broadline distributor, you need to find the right producers of goods. You can also establish partnerships with large wholesale businesses or importers.
    4. Obtain the necessary licenses and permits. Distributors need to take care of some paperwork before they start offering products. That includes things like an eCommerce business license. Check out our article on how to get a wholesale license.
    5. Start selling. Once you have the green light to run your wholesale business, start selling products. Reaching out to businesses and offering them your services is not enough. In addition, make sure to sell products on B2B ecommerce platforms like BlueCart. These platforms are ideal for finding new customers for your wholesale business.

    How to Run a Wholesale Business Successfully

    When you’re looking to run a wholesale business successfully, you must remember that every business is different. However, regardless of the wholesale products that you sell, the key to success is controlling your cash flow. You may want to consider white label vs. private label products.

    Aside from cash flow, you have to focus on several important factors when running a wholesale business. This way, you’ll have a thriving wholesale business. 

    Eight factors to consider when you want to run a wholesale business:

    1. Create an accessible website
    2. Use an enterprise resource planning (ERP) system
    3. Pick a reliable supplier
    4. Familiarize yourself with legal documents
    5. Find in-demand products
    6. Focus on customer service
    7. Form a reliable team
    8. Develop a clear vision and set goals

    1. Create an Accessible Website

    Your eCommerce website design should include the wholesale price of items you sell. These prices also need to match your accounting and inventory management system. It’s important for your website also to have an about us page, like one from an about us template, and a privacy policy. Consider the best eCommerce platform for SEO.

    2. Get an ERP System

    The ERP meaning refers to enterprise resource planning systems that integrate daily business processes. An ERP system allows you to integrate your inventory management system. This includes scanners that work with each SKU number and UPC code

    There are ERP system examples and an ERP systems list to browse through. This will allow you to understand the benefits of ERP and how ERP implementation works. 

    3. Pick a Reliable Supplier

    Evaluate the different suppliers across multiple channels of the industry. Consider the quality of the products you’re interested in, not just their price. Look into dropshipping vendors, subscription box suppliers, and others within your product category. 

    It’s also important to utilize proper supplier relationship management practices and use a wholesale purchase agreement with suppliers. This keeps your business in good legal standing. 

    4. Familiarize Yourself With Legal Documents

    As a business owner, it’s required for you to obtain the proper licenses. This is true when opening a restaurant and wholesale business. Before you sell any wholesale products, you need to have a wholesale license. You might even need to learn how to ship wine.

    5. Find In-Demand Products

    In order to make wholesale sales, you have to find the right customer base. To do that, you first need the right high demand products. Explore selling a wholesale meat subscription box, wholesale produce, wholesale meat and seafood, or wholesale dairy

    Look into a wholesale directory to explore products for different niches. Keep in mind that if you’re selling perishable items you must know how to ship them. These include wholesale seafood, bulk fish, and wholesale meat

    Familiarize yourself with how to ship frozen meat and similar products. One of the biggest food shipping issues is food safety. Proper shipping and handling ensure proper and timely delivery. 

    6. Focus On Customer Service

    When you’re thinking about how to run a wholesale business successfully, you have to consider your customers. Customer service is a crucial part of running a successful wholesale distribution business. If possible, answer customer questions, provide repair and maintenance options, and release product upgrades.

    7. Form a Reliable Team

    A reliable team will allow you to streamline your wholesale business. You’ll have the opportunity to manage different aspects, including new customer development, inventory tracking, and demand planning. It’s also possible to manage purchasing processes and financial reporting, such as cost of goods sold (COGS) information and your dropshipping profit margin

    8. Develop a Clear Vision

    A wholesale business or eCommerce business plan is only the start. Having a long term vision for your business is crucial for its success. A clear vision will provide a sense of purpose for your business. With this vision, you’ll be able to set goals and achieve them as time goes on. 

    By setting business goals, you have something to look forward to and something to work towards achieving. Incremental sales goals are a good start and allow you to grow sustainably. 

    How to Run a Wholesale Business Online

    Running a wholesale business in the past used to consist of cold-calling, print catalogs instead of a digital catalog, and door-to-door sales. Day to day, there are different ways to manage your business and sell your products, including B2B eCommerce

    Familiarize yourself with what is a B2B business to understand the benefit of B2B eCommerce. In a technological world, customers value the internet and its convenience.

    Companies are expanding their businesses through online platforms. Some combine their brick and mortar stores with eCommerce businesses, while others rely solely on different types of online marketplaces.

    Here are three core steps when learning how to run a wholesale business online:

    1. Optimize Your Website’s Images and Descriptions

    Selling online means that most buyers rely on your product images and descriptions. In order to ensure that your buyers know what they’re purchasing, it’s crucial to keep them informed. 

    Start by uploading quality product photos as part of your wholesale marketing plan. Keep in mind that these photos should have a uniform background and good lighting.

    Adding multiple images of your products from different angles will help secure the sale. This is because customers now clearly understand the product they’re interested in purchasing. 

    The product descriptions are also important. These should cover all product specifications, including the measurements, materials, and country of origin. The description should include minimum order quantity, or MOQ, and shipping restrictions. Don’t get confused with EOQ

    1. Pick the Ideal Selling Platform

    You must pick the ideal online marketplace to sell your wholesale products. You have the opportunity to follow a marketplace business model and consider the best marketplace apps to sell on. 

    Common wholesale selling platforms include Alibaba, Amazon Business, and Etsy Wholesale. Choosing the right platform will depend on the products you’re selling. For instance, Alibaba is an ideal platform for big manufacturers that don’t prioritize brand identity. However, Etsy Wholesale is a good platform for designers and artists that produce their products. 

    1. Consider Business Process Integrations

    When considering how to run a wholesale business, you have to think about the integration possibilities. This includes syncing various aspects of your business such as your eCommerce store to your inventory and accounting software. 

    Inventory management software, such as restaurant inventory software, adjusts stock levels based on daily sales. This improves accuracy when it comes to inventory control as it allows for real-time updates. These business integrations save time and effort and improve efficiency-especially within efficient business systems.

    Integrating accounting and order fulfillment lets you deliver an improved customer experience. With eCommerce fulfillment options, customers typically get automatic notifications about their order status.

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    Frequently Asked Questions About How to Run a Wholesale Business

    What Type of Wholesale Business Is Best?

    The best wholesale businesses include: 

    These are considered to be the best wholesale businesses because they tend to bring much profit. They also don’t require much capital to start the business. 

    Is Starting a Wholesale Business Profitable?

    Yes, starting a wholesale business is profitable. However, the profit earned depends on how successful your business is. Wholesale businesses purchase items in large quantities, meaning that the price per unit is lower than the standard retail price. This is what makes such businesses profitable. 

    Where Do Wholesalers Buy Their Products?

    Wholesalers or wholesale distributors purchase their products from manufacturers. Most manufacturers sell these products at a lower price due to the bulk volume. Wholesalers make their money by selling the products to retailers at an escalating price. However, this price is still better than the one the distributor and retailer would get if they purchased right from the manufacturer.

    Can Individuals Buy Wholesale Products?

    Yes, individuals can buy wholesale products, but only as a consumer. Otherwise, you need to have a wholesale license.

    BlueCart is a comprehensive eCommerce software solution for wholesalers, small businesses, dropshippers, and hospitality establishments. We offer a complete set of tools including unlimited digital catalogs, shipping and delivery route management, integrated payment processing, and SEO-ready digital storefronts. Book a demo now to see how BlueCart can save you money and streamline processes today. Note that product demos are a walkthrough of our software, not a source of business advice.

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