Starting a Wholesale Business

Starting a Wholesale Business.

Whether you’re currently a white-collar professional, a manager worried about being downsized, or bored with your current job, a wholesale distributorship may be the right business for you. Much like the merchant traders of the 18th century, you’ll be trading goods for profit. The modern-day wholesale distributor however, evolved from those hardy romantic traders standing on a dock in the dead of night haggling over a tea shipment, who bought and sold goods hundreds of years ago.

We live in a messy world where many factors influence sales. Examining how increased advertising is affecting sales is often a misleading way to measure advertising impact. A quick look at what happens in a consumer’s life every day will give you great ideas to improve sales.

Getting into the Business

It is interesting and important to know that hundreds of new wholesale distribution businesses are started every year; whether they can grow the firm and really become a long-term entity is the much more difficult guess. Typically, ex-salespeople from larger distributors break out on their own with a few clients in tow, to form these businesses. Success in wholesale distribution involves moving from a customer service/sales orientation to the operational process of managing a very complex business.


The field of wholesale distribution requires a nose for sniffing out the next “hot” item in your particular category, good negotiation skills, and keen salesmanship. It is a true buying and selling game, where the idea is to buy the product at a low price, then make a profit by tacking on a dollar amount that still makes the deal attractive to your customer.

Since 1987, wholesale distributors’ share of U.S. private industry gross domestic product (GDP) has remained steady at 7%. Today, total U.S. wholesale distributor sales are approximately $3.2 trillion, with segments ranging from grocery and food-service distributors which make up 13% of the total, or $424.7 billion in revenues, to furniture and home furnishings wholesalers comprising 2 %of the total, or $48.7 billion in revenues. That’s a big chunk of change, and one that you can tap into.


Most experts feel a sales background is necessary to succeed in the wholesale distribution business. The ‘people’s skills’ that an outside salesperson who hits the streets or picks up the phone and goes on a cold-calling spree to search for new customers has are considered important for this. However, some experts argue that an individual should possess a varied job background in order to be able to handle a wholesale business efficiently.

A smart wholesaler will know how to operate very efficiently and turn his inventory over quickly; which are the keys to making money. Remember, in this business, you will be dealing with business customers, who already know a few tricks of the trade; unlike other business owners, who deal with general consumers. The start-up entrepreneur must be able to understand customer needs and learn how to serve them well.


Using Media

Today, most famous social media platforms allow businesses to run ads that attract specific groups of users based on what information they include in their profiles. Traditionally, the goal in media planning was to minimize wasted advertising, which was achieved by reducing the quantity of advertising sent to consumers who are unlikely to purchase or have an interest in their product and who are not active in the category. This gave birth to the idea of target advertising. The effectiveness of advertising is a highly controversial topic.  It has been proven that advertising certainly leads to increase in sales, compared with no advertising.  One study suggests that 1% increase in ad spending leads to 0.05% increase in sales. Simple figures.

As discussed in my article Social Media and Happy Customer, this concept has proven to be a very effective way to reach out to the right customers through social media. For a small-scale wholesaler, it is all the more important to save time and effort and find a way to connect only with consumers who would turn into customers. At HyperEffects, we pride ourselves in our ability to get your business on a platform that is used and utilized by millions every day. You can also get a personalized mobile app to connect with your clients on a personal level with customized offers, push notifications and many other interactive features that will save you the hassle of constantly being on calls. Enrol today for our free one hour session to understand more about this. We are here to help your business grow!

Hyper Effects | Grow Your Business

Leave a Reply

Your email address will not be published. Required fields are marked *