Things That Should be Kept Into Mind When Starting a Wholesale Distribution Business

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Starting Your Wholesale Distribution Business

Starting your own business is not as simple as a walk in a park, especially if you’re thinking of starting a wholesale distributorship business. In this line of business, it is necessary that you provide the time needed in managing and your business. It is also necessary that you have the knack for it, or the ability to handle a business, one of which is experience.

Experience is the most important part of handling a wholesale distributorship business, such as a wholesale clothing business. You wouldn’t want to start your business with nothing but your dreams of grandeur. It is important that you have that innate ability or skill in handling a certain business, may it be experience from helping your parents on handling their business. Or may it be experience in working as a sales representative of a business. Or may it be that you have studied the art of business handling. Or better yet, possessing a bloodline of a natural businessman or woman. Whatever kind of experience you may possess, it is still important that you know what you’ll do when you face certain business adversities, such as taking Risks.

Taking risks are very common when handling a wholesale distributorship business such as a wholesale clothing business or any kind of businesses in manner. Risks are a nuisance if you ask me, but risks are a very important part of a growing business. Without taking necessary risks, your business will stay as they are. But take these risks, and you might see your business in what you have dreamed. But failing in these risks may lead your business to fall. So I’ll ask you this, are you the risk taker?

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A Head Start

If you’re looking to start a business of wholesale distributorship, there are basically three avenues that you can choose from: buy an existing business, start from scratch or buy into a business opportunity. Now in buying an existing business, it may require a lot of cash and risk taking, depending on the scale of the business you’re willing to buy of course. The good thing in buying an existing business is that you can extract every single knowledge the seller has in handing a business. And you may even inherit his or her existing client base, which could prove extremely valuable.

Starting from scratch is also costly, but it does allow you to have a make-or-break scenario where it is up to you which way the business’ reputation goes, not to be preceded by an existing owner’s reputation. The only downside of starting from scratch is that you also have to build your reputation from scratch. Which means lots of sales and marketing for at least the first two years or until your client base is large enough to reach critical mass.

The last of the options maybe perhaps the most risky of the three, as all business opportunities must be thoroughly explored before any money or precious time is invested. However, the right opportunity can mean support, training and quick success if the originating company has already proven itself to be profitable, reputable and durable.

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Your Financial Capabilities

During your startup process in starting your own wholesale distributorship business, such as a wholesale clothing business, it is important that you make an assessment on all of your financial capabilities and decide on how to approach your business. Going for full-time commitment for your business may probably mean for quicker success, mainly because you will be devoting your whole time to build your business’ reputation, whereas in part-time, the success of your business will come in years.

Now the amount necessary for your business will depend greatly on what you are trying to sell. For instance, you’re trying to start a wholesale clothing business that sells clothing for all ages; your capital may only reach around $500 to $700 US dollars, with only the

basic equipment. But when you start a wholesale distributorship business of electronics, with a complete set of equipments such as warehouse or some internal necessities, $700 US dollars isn’t going to cut it.

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“Your” Business Processes

Before venturing into the entrepreneurial realm of wholesale distributorship business, it is important that you know the basic relationships of a vendor and supplier.

There is a basic process on how the distribution process works. It is as simple as the product from a manufacturer going to the distributor (which is you) then to the vendors then to the general public. As the wholesale distributor, you are on the position to distribute the product through your vendors that will involve matching up the manufacturer and customer by obtaining quality products at a reasonable price and then selling them to the companies that need them.

Distribution means purchasing a product from a supplier (which is usually the manufacturer or other distributor), then selling it to your vendors. As a wholesale distributor, you will be specializing in selling to vendors (or other distributor) who are in need of the product you have, which in return sell it to the end users. It’s one of the purest examples of the business-to-business function, as opposed to a business-to-consumer function, in which companies sell to the general public.

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Weighing in of Process Cost

Each wholesale distribution business is unique from each other, each having its own unique needs. You who have started a wholesale business in your basement have different financial needs than those that started a business that involves electronics in the middle of an industrial park.

Necessities like office space, a telephone, fax machine and personal computer will make up the core of your business, and this goes for any kind of businesses. This means an office rental fee if you’re working from anywhere but home, a telephone bill and ISP fees for getting on the internet.

Now whatever business you have in mind, like a wholesale clothing business, you’ll need some type of warehousing or storage to store all your stocks: and this commonly means an additional leasing fee. But if your office is within your warehouse, you may combine the bill from your office and from your warehouse.

If you are delivering locally, you’ll only need an adequate form of transportation to deliver your stock to your vendors. But if your vendor’s base is located further miles away from your office or from your storehouse, then you’ll also need to set up a working relationship with one or more shipping companies such as FedEx. So it is important that you keep a list of contacts that can help you deliver your stock with ease and with lesser fee.

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A Routine of a Life Time

Like any other businesses, a wholesale distributorship business involves sales and marketing, accounting, shipping and receiving, and customer service functions on a daily basis. You must also handle tasks like contacting existing and prospective customers, processing orders, supporting customers who need help with problems that may crop up, and doing market research. So pretty much, this will be your life when handling a business such as this.

Most distributors rely on specialized software packages to handle all tasks and whatever else may come their way during the course of the day, such as inventory control, shipping and receiving, accounting, client management, and bar-coding.

Technology has helped increase productivity while cutting down on the amount of time spent on repetitive activities, such as entering addresses used to create mailing labels for catalogs and individual orders. It is important for you to utilize all the necessary things that can help improve the service that your business is providing, such as the use of some utility software.

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