Every year, hundreds of entrepreneurs start wholesale businesses across the United States. What seems like a business with potential -- buying products at discounted prices and selling them to companies for a profit -- can be too difficult to sustain unless you have strong skills as a salesperson, according to President Adam Fein of Pembroke Consulting Inc. in Philadelphia. With the right approach, however, you can make your wholesale business one that lasts.
Find retailers in your area whose products you're familiar with, as you'll need to be able to answer lots of questions when selling. Ask them what products they want in their stores, what they like and dislike about their current wholesalers and how much they pay for products.
Give your business a name that no other business is using. Contact the secretary of state to be sure your name is unique.
Rent a warehouse to store wholesale items. Take into account what kinds of products you will sell and how many you will need to keep in stock at any given time when choosing the size of the warehouse.
Use a wholesale product sourcing guide such as proproductsourcing.com to find products that the retailers you spoke to will want to buy. Buy products of the highest quality and lowest price you can find; this combination will increase both your business and your profit. Store the items in your warehouse.
Set prices for your products that allow you to make a profit but are still lower than retail prices. Set your prices lower than your competitors' prices when possible, but rely on your proximity to your customers, the quality of your goods, and a professional manner to sell your goods.
Contact local retailers with a list of your inventory, prices, operating hours and contact information. Respond promptly to any replies and establish a written contract detailing the specific products and prices you are to provide to the retailer. Keep your end of the agreement; it's easier to keep customers than it is to find new ones.
Set hours to be present at your warehouse for customers. Hire delivery drivers to be present during those hours, or plan to tell customers that those are the hours to send their drivers for pickup.
Visit retailers in person that have not shown an interest in your service to find out what you can do to earn their business. Implement these changes in your business where feasible, and approach those retailers again to come to a business agreement.
Visit your local Small Business Administration office to be sure you fulfill all the legal requirements for a wholesale business in your county.