Are you thinking of starting a wholesaling business in 2021?
Wholesaling plays a fundamental role in the overall distribution and sales of a particular product. It is also a very competitive market, but you can be successful at wholesaling with the right resources and connections.
Wholesaling gives you an advantage because unlike the retail business where the money is made one product at a time; the wholesale business allows you to earn more. Since your customers are retailers, they will need to buy your product in volumes to sell to their customers.
You might want to ask yourself; Do you want to stock your products or have them drop-shipped to your customers? What products do you want to sell, and where can you find suppliers?
In this article, we will run through tips on how to start a wholesaling business in 2021. Let’s dive in!
1. Choose a Market for Your Business
This is the most crucial part of starting a wholesaling business. You will need to decide which industry or market needs your product. You will need to ask yourself. What products should I sell? Who needs my products?
As an SME in Africa, it is important to choose products that are moving in your current economy. You will need to find dealers, store owners, retailers, and customers who need your product.
You would also need to know who your competition is, their prices and what kinds of products they sell. This will help you understand which market to target and what kind of products to sell. There are several profitable wholesaling ideas. You could wholesale in Jewelry, textile, or even organic food. The key here is research.
2. Choose a Location for Your Business
This is the next most important step. If you decide to stock your product, you will need to get a warehouse to run your business.
Choosing a central location for access and easy movement of goods is also something you would need to consider.
Secondly, you will need to hire efficient staff to ensure that your product is not misplaced or damaged. You could opt for a family member you can trust.
3. Choose Your Manufacturers/suppliers
You will need to identify manufacturers who are willing to give you their product to sell. You might want to note that some companies might require you to meet certain sales targets. You can also decide to talk to distributors that can get you a dealership. Wholesaling is about networking and establishing relationships.
4. Establish an Online Presence
In 2021, going online has become an important business strategy. Your wholesaling business is no different. The online space has become saturated with buyers making several buying decisions every day.
Establishing yourself online will help build trust and establish you as an authentic brand. Not only does it build trust, but it also attracts retailers and suppliers. It is a great way to tell prospective clients that you are ready to do business.
5. Get an easy to use inventory software
With the number of goods going in and out of your warehouse, having inventory software will pay a lot and give your business a smoother run. Inventory software helps you keep track of your inventory and determine your business’s demand and supply relation.
6. Check for Return Policies
When looking for manufacturers/suppliers, it is important to check for their return policies. You would need to check their return policies and how they handle goods being returned to them. If their return policy isn’t clear, it is best to stay clear of those manufacturers. Inventory not sold is a waste of money.
In return, you would need to create friendly return policies that allow retailers to return goods they can’t sell. To create a comprehensive return policy, you should check with your manufacturers and align your return policies accordingly.
We hope that these steps give you a good platform to start your wholesaling business. To grow and establish yourself in the wholesale business, you would need to identify product trends and have a good understanding of your market. Don’t be afraid to take that wild step in starting your wholesaling business.
Do you have any questions or comments on SMEs in Africa? Kindly drop them in the comment section below!