Visiting other retailers with similar business models can help you to identify product lines as well as get an idea of the amount of inventory needed.
Starting a retail store requires inventory. Choosing inventory and finding wholesalers to work with on an ongoing basis can be a time-consuming process. Visiting other retailers with similar business models can help you to identify product lines as well as get an idea of the amount of inventory needed. If visits to out-of-market competitors are made, the owners may be more willing to share information about their business practices.
Get a resale certificate. Many wholesalers will not work with a business that does not have a resale certificate issued by the state. This is typically handled by the secretary of state's office for each state. It is a simple application process and usually involves a small handling fee. When setting up a business account with wholesalers, you will be asked for your resale certificate number or sales tax identification number. This is the number you will provide that alerts the wholesaler that you are indeed a business that is purchasing products for the purpose of resale.
Secure financing for inventory. If financing is needed, speak to your local bank. The Small Business Administration can guarantee loans for small businesses for inventory and other purposes. This lessens the risk for the bank while enabling a new business to secure the financing needed to operate. Check with your local bank for an SBA affiliation. If there is not one, call the SBA regional office (see References) for a referral.
Visit a merchandise mart. Across the nation, there are marts where wholesalers house their storefronts. In addition to permanent showroom locations, the merchandise marts hold quarterly shows where orders can be placed. This can be an excellent way to see a wide variety of products, obtain pricing information and place orders. Unlike contacting merchants separately, this avenue ensure you will be able to place orders as your acceptance into the merchandise mart vouches for your credibility as a retail establishment.
Scope out the competition. Visit local competitors to see what merchandise they are carrying and what seems to be popular. Look at the tags of the merchandise to obtain the manufacturer’s name and possibly the web address. This gives the contact information needed to obtain more information about the product line. Be aware that very established and popular product lines will generally not do business with new retailers. It may take some time to establish proof of sales as well as success with other wholesalers before an account can be created.
- Develop a budget and stick to it. Ask wholesalers about buy back programs for unsold merchandise.
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