Running a successful wholesale business can seem like a daunting prospect, especially given the intense competition. Every decision affects your likelihood of success.
There are so many factors that can affect your success. Also, there are many ways that can help you improve your business. Practical issues like storage and inventory management should be addressed, as well as customer service. It’s also important to look at the stories of some successful wholesalers and learn from them.
Here are ten things you have to consider if you want to run a successful wholesale business.
Rethink Your Business Plan
A clear business plan will influence every decision you make for your company. There are so many companies competing in the wholesale market that it is not enough to just define yourself as a wholesaler.
Determine the type of business you want to run. This will help you find similar businesses that are successful in the field. You can choose to operate as a merchant wholesaler or to sell directly to consumers. Also, you should decide whether you want to sell a broad range of items or focus on a specific area.
Know Your Target Market
A key characteristic of many successful wholesalers is a targeted business strategy. This is one of the reasons it is so important to refine your business plan early on. You should know who your ideal customer is and what other companies might compete with you. Also focus on finding gaps in the market and avoid having too much competition.
Taking Sam’s Club as the example, Sam found the gaps when he started. Warehouse stores are designed to appeal to people living in far-away urban areas. So there’s little competition with Walmart, which is usually located in small towns.
Keep Good Relationship With Suppliers
Wholesale can be seen as a middle role between manufacturers and end customers. Like maintaining good relationship with your customers, you shouldn’t neglect your relationship with suppliers. Your relationship with suppliers have a direct impact on your business. Try best to let your suppliers rely on you to meet their sales expectations.
Prioritize Popular Products
Tracking your inventory means you can prioritize your most popular items. This doesn’t mean you’ll be selling these products exclusively, but you can use them to attract customers to your business. Popular products available in bulk at low prices that will increase traffic to your store or subscription service.
Familiarize Yourself with Inventory
Familiarity with your inventory is critical for day-to-day wholesale efficiency. Even if you have extensive inventory and large storage facilities, you should know exactly what’s in your inventory.
A good storage system is especially important. A well-planned warehouse layout with storage racking that allow you to organize your inventory can help you keep track of everything efficiently. If your employees spend too long trying to find items in your inventory, you’re wasting time and money.
Limit Current Inventory
While it may be tempting to offer as many products as possible, it can slow down your system. Fewer inventory items means faster inventory turns and allows you to streamline your supply chain. This principle is espoused by Costco, one of the most popular wholesale retailers in the world. Costco offers relatively few products compared to other large retail chains. However, this allows the supply chain to operate at peak efficiency.
Clear Inventory Regularly
Outdated or dead inventory wastes space and therefore money. Getting the most out of your storage is critical to the success of your wholesale business. Frequent inventory checks are very important. You can use an automated system for this or perform checks manually. Either way, take note of any inventory that hasn’t been moved in a while and delete it.
This is especially important for businesses that rely on seasonal sales. Removing off-season inventory to make way for new inventory can make better use of your storage space. If you can sell off-season inventory next season, try to separate long-term storage from high-traffic areas.
Use Pre-sale for New Product
If you choose to buy a new product or line, you may be concerned about the investment risk. This is a particular problem if you want to try something different from the existing stock. Professional wholesale businesses that rely on specific customer groups may be at risk of failed purchases.
To avoid the risk of failing your investment, try offering a pre-sale option. To do this, you must build strong relationships with your customer base. They have to trust your choices. You can make your first purchase with more peace of mind if they’re willing to pre-order from your inventory.
Make Reasonable Commitments
Wholesale businesses are designed to be as simple as possible. Your customers would want to know what to expect from your business and meet their expectations. In order to solidify your business position, you must determine the commitment you make to your customers. At the same time, you must ensure that these commitments are reasonable. Customer satisfaction is higher when smaller promises are fulfilled, rather than unrealistic ones that are not fulfilled. For example, always estimate delivery times accurately.
Prioritize Customer Service
Perhaps the toughest challenge facing the wholesale market today is that of online retailers. If Amazon offers similar products, your customers may opt for popular online ordering options. However, the sheer size of big retailers like Amazon means they can’t compete with personalized customer service. Building relationships with your buyers can be one of the best ways to guarantee continued business and increase sales.
This requires you to invest time and money. Your employees must be trained in customer service principles. You must also be willing to let your customer’s needs or complaints come to a satisfactory conclusion. While these investments won’t necessarily see immediate returns, they’re critical when competing against large but anonymous competitors.
