Running Wholesale Business – Choosing Your Retail Partners
Choosing your business partners plays a vital role in the success of your business, as wholesaler you have to choose the right distributors and more importantly you have to choose the best retail partners for your business. Having the wrong partner will cause a lot of problems in your business that will eat most of your time, like going to the court and so on.
You want to make sure that before choosing any retail partner you have deep insight on their personalities and have to qualify them on whether they possess the qualities to do business with you or not. One of the best ways to choose the right retail partner is by qualifying them, you want to make sure their consumers are looking for your product type and they can pay you on time for your products and services.
In this article we’ll some tips on how to choose your retail partners and also important information you need to know about retailers before approaching them to do business.
What You Need To Know About Retailers
- Retailers have a lot of overheads to take care of, such as rent, sales staffs, furnishings, signage and more.
- The cost of starting retailing business can surpass wholesale business, because with wholesale you don’t necessarily need to have a store, you can ship your products directly from distributers to retailers, as a wholesaler you can just become the middle man connecting retailers and distributing while taking your share of profit.
- Stocks stay long in retail stores than in wholesale store.
- It’s important to display the product in retail store, only then consumers can make selection, though there will be lots of requests also.
- Margins are small.
- Foot traffic plays a key role in retail stores, unless the retail store relies on ecommerce to sell their products.
The above elements were mentioned because they affect wholesalers business and should help you understand selling to retailers is a different game and there are a lot of challenges ahead of you as a wholesaler.
How To Choose Retail Partners
When it comes to wholesale cash flow plays a vital role, as a wholesaler you need to realize that most of the time your products will be offered on credit, but this doesn’t mean you have starve yourself just for the sake of releasing your products to retailers. If you don’t have problem with releasing your products on net 30, 60, 100 more…, you can go all the way to offer your products that way. You’ll find a lot of retailers who’ll do business with you when you offer long credit extension, you just need to make sure you control your cash flow, in the sense that you won’t be requesting for loan that will incur interest as you already know.
Qualify your retailers
You need to conduct a lot of research on this one, you want to make a list of all the potential prospects you want to contact in any region. Getting the first 10 retailers will always be easy, but if you’re looking to build a list of 100 or 1000, then you’ll face a lot of challenges and you need to find resources that list retailers in any particular area.
After putting your list together you have to research on every business to ensure they qualify to partner with you as a wholesaler. Follow their social media channels, visit their store just to browse around or even buy a couple of things, ask questions and conduct a survey. These are some of the ways you can discover who they’re and what their consumers buy the most. By the time you finished your research you should be able to qualify them and can understand whether your product will sell or not.
Minimum Order Requirements
As wholesaler you already buy your products in bulk and at the same time you want to sell at larger quantities. You don’t want to stick with a retailer that buys only a few of your products; you should find retailers that will consume your products a lot. Before making offers to retailers you have to state the minimum order that’s needed in order to get the discount you’re offering.
I believe these are some of the important aspects every wholesaler need to consider first before locking deals with retailers, there are a lot of other factors to consider and you should always take into consideration every element that will play a role in your relationship with retailers, and most importantly always do things that will maximize your profit for long term.