Whether you are just thinking about, or you have decided that you would like to start running a wholesale business, there are a number of items that you should spend considerable time planning and researching before going full steam ahead. Proper planning and fact-finding up-front can not only save you from a lot of headaches in the beginning, but can also mean the difference between a successful wholesale business versus a monetary disaster waiting to happen.
In this article we will provide you with ten tips to help guide you along the way as you begin planning for your business. They are presented in chronological order so that you can use them as a way to plan out the proper steps along the way. Remember, success depends on many factors – and the most important factor is your determination and energy you put into making your business a success!
Step 1: Ask Yourself Why?
Why do you want to get into the wholesaling business? It is because you would enjoy working with other businesses and manufacturers being the main point of contact between the two? Or is it because you think it is an easy way to make money quick?
Wholesaling is a demanding business, and can require lots of up-front capital, warehousing, logistics planning and customer service skills. As the main channel between the manufacturer and retailers you may find yourself dealing with hundreds of thousands of units of merchandise needing to be shipped across the country on a moments notice. Large retailers often pay on a Net-10 or Net-30 schedule, meaning payment is made after the goods are delivered. What would you do if a retailer did not pay or went bankrupt before you received payment?
Step 2: Study Your Competition
It does no good to enter a market where there already exist established, credible wholesalers for a given product. Retailers want to know they have a dependable supply source that meets their terms and often will not change wholesalers for an established product. Just because you build the warehouse does not mean they will come.
Use your local Chamber of Commerce, the Internet and even visit with retailers to find out what wholesalers exist in your area. If you want to specialize in a specific product, contact the manufacturer directly to find out who handles wholesaling for them already in your region. There may be none in your state, or there could be three down the street.
Step 3: Assess your Financial Situation
Wholesaling can require a lot of up-front capital and expenditures before you even see one cent of income. Do you have the resources to spend on setting up a relationship with a manufacturer who will most likely require you to buy in huge quantities from them? Can you afford to wait up to 30 days for payment? Do you have the money to invest in shipping freight or setting up your own delivery service?
Be sure to look past the startup costs as well. Employees, taxes, property rental and insurance are just a few of the things you will need to factor in as ongoing costs.
Step 4: The Business Plan
A solid business plan is the foundation of any business. You need to make sure that you have spelled out what you intend to do and how you intend to get it done. Not only will banks require this for financing, but often other businesses you deal with will want to see it as well. It should be the guidelines that you follow every day in your business to achieve the goals you have set forth.
For this part, it is often wise to work with a business lawyer or seek professional advice from business consulting services. A good resource to help you find people in your area with the necessary skills and background is the Small Business Administration government site.
Step 5: Apply for Licenses, Taxing Certificates and Other Necessary Paperwork
Nothing is as certain as death and taxes. It is no different in business, with one exception. As a wholesaler you will be required to pay taxes and other fees to your state and to the federal government.
The one exception is that you will be granted tax-exempt status for the actual goods you are moving between the manufacturer and other retailers. This can be a tricky process and is handled at the state level.
Again, for this part you will want to make extensive use of your state taxing authority as well as local Chambers of Commerce. One wrong mistake here can end up costing you not only money, but possible your entire business.
Step 6: Establish Your Facilities
Location, location, location. Businesses must exist somewhere and like most things in life there are rules and regulations on where they can be. Will you be having semi-trailers coming to your location at all hours of the day and night? Will you have a storefront for vendors and clients to come calling at? What about electrical, water and sewage needs?
Zoning laws exist to make sure that the right structures end up in the right places. Nobody wants a warehouse next door to them in a residential neighborhood. Work with commercial real-estate agencies to find a suitable place for your business.
Step 7: Establish Your Relationships
You have the facilities, you have the finance – now do you have anyone supplying you product or customers for that product? Work with manufacturers and retailers to build a relationship. This can be one of the most difficult parts of the experience, and is where the rubber hits the road.
In addition, relationships extend beyond your customers and suppliers. It is good practice to establish relations with your local Chamber of Commerce, retail associations and labor organizations in your area.
Step 8: Marketing
Wholesalers traditionally do not advertise. That does not mean you should not market your business to others, after all how can you build relationships or expand on existing ones? Wholesaling guides are published and distributed to many retailers and this is where the bulk of your marketing efforts will be directed. The other half should be in going to retailers directly, meeting with buyers and outlining your services. Just because you have a customer today does not mean you can rest on your laurels.
Marketing works hand in hand with building a relationship and maintaining it.
Step 9: The Machine in Motion: Servicing Your Customers
Product is coming in, retailers are placing orders – we are all done right? Not exactly. Getting the product to your customers, answering questions about delivery timeline, working with vendors to obtain new product lines, it is a complex and demanding part of the business.
In today’s “just in time” marketing model a delay in shipment could mean the end to a business relationship. You must keep your customers informed of any status changes, pricing concerns and product movements from your facility to their loading dock. This is where back end systems come into play by maintaining records and logs of all activity with that customer. Do not underestimate the value of a good Customer Relationship Management system.
Step 10: Employees, Accounts Receivable and Other Financial Matters
Once everything is up and running your next focus is your business financial present. Employees need to be hired and fired. Payroll needs to be met. Money must come in, and money must go out. Here you should invest in financial talent and services if you do not possess them already.
One oversight can mean the loss of hundreds of thousands of dollars; a missed payroll deadline could mean your entire business comes to a halt. It is critical that you constantly keep an eye on the books and on your expenditures. Know when to tighten the belt, and know when to expand.
Top 10 Tips For Getting Started In The Wholesale Business
Home-Based Business – Getting Started
Many home-based businesses are either sole proprietor or a general partnership. These are simplified methods of developing a business and can often allow the greatest flexibility in startup and business termination.
With a sole proprietor business you are the single business owner paying all taxes at years end. You will likely be required to obtain a business license and applicable permits.
With a general partnership a partnership agreement is generally developed. The partnership is dissolved when one party wishes to end their stake in the business. This type of business is developed when either two friends wish to start a business together or two family members. There are also limited partnerships, corporations and limited liability companies that can be developed, but for the sake of this article we will key in on the simplest forms of business ownership.
With most online business that operates as a home-based business there is not the need for an in-home showroom or customer visitation. In fact, many municipalities and or covenant communities do not allow the sale of items through a more traditional home-based business where items are actually sold out of the home to visiting customers.
Should your home-based business receive in-home business you would likely need to look at purchasing business insurance. Most homeowner policies will not cover loss if it is determined the loss was actually related to a business visit or transaction.
The income produced from a home-based online business is considered taxable under self-employment standards in the United States. This means that you will be responsible to manage the tax liability on your income. As mentioned above this can be managed when your yearly taxes are prepared. If you have a net income that exceeds $400, self-employment taxes will need to be paid. You should also know that the Internal Revenue Service pays particular attention to home office deductions so be sure you follow all guidelines if you claim your home office as a deduction in your home-based business because some things are deductible while others are not.
You should also make sure to keep very good records of all profit and loss. You can work with an accountant to discover the specific deductions you can claim on the business you have chosen to operate.
Tax time will be a bit more stressful with additional forms to fill out and information to have on hand, but this is a small price to pay for using your skills in the development of a home-based business.
10 Easy Steps For Getting Video On Your Business Website
I'm often asked, "I have no video training but I want to put video on my website to help promote my products and services what can I do?" Well the answer is simple. If you can shoot a home movie you can put a video clip on your website. Now the first thing is to not be scared of the camera. A good sales person needs to be able to speak clearly and present their product in a manner that everyone can understand and enjoy. So with that in mind turn on your camera, cell phone, or whatever video capturing tool you have and begin shooting. But here are a few tips for making your shoot successful and getting it up on your website.
1. Speak clearly, and so that everyone watching can understand what your saying and what your product is about.
2. Make sure you have enough light so that you and your product can be seen. But be aware that you can also have to much light. So the best thing to do is to test your video and the area your going to be shot in. Make sure you look natural.
3. A microphone is important and you need to be heard. If your using a mini-dv camera you can easily get a microphone that can attach from the camera to your clothing. Use make sure you can't see the wire that connects the mic and the camera during your video.
4. Have FUN! No one wants to see a sour face on camera. So make sure you are having fun and that you SMILE. The better you come across on camera the more people would want to buy your product or services.
5. Don't use big words in your video presentation. Keep it short sweet and simple.
6. Once you've finished your recording, watch it. Make sure it's what you want and something that you'll feel proud to have on your website.
7. Now get the clip to your computer. Your camera will have instructions on how to upload the footage. Now you can get fancy and use one of the high end video editing products. But those take a long time to learn. So if your on a PC use Windows MovieMaker and if your on a Mac use IMove and edit your clip to your licking. Don't use to make crazy effects keep it about you and your product.
8. Now once your clip is edited you need to output it to a web file. If your on a PC then output the file to a WMV. And if your on a MAC then output your clip to a .MOV file.
9. Upload it! If you don't have server space then use http://Video.Google.com or http://Youtube.com. You can easily upload your video to these services. Not only will you have the code to embed the file to your website but you will also allow others to see your video and your product who haven't been to your site yet. It will be as easy as CUT and PASTE to an HTML page.
10. Promote your video clip. Include links to your clip in your weekly newsletters. Send your clip to your friends, family, and business associates. Let them see the work you've done and ask them to pass it on to other friends. Son you'll notice that you have a ton of visitors watching your video and more traffic to your website.
Improving Schools: Getting Down To Business
When it comes to investing in America's future, business leaders are saying the smart money is on education.
"Education is the whole ball of wax. Capital can go anywhere in the world to buy labor, and there is nothing we can do to change that. It comes down to having the labor that is best educated and has the most skills. That is what is going to attract capital and create jobs," explained Patrick Byrne, chairman and CEO of Overstock.com.
Analysts say we see this every day as certain states attract particular industries. For instance, California's Silicon Valley is well-known for technological innovations. As jobs head to specific areas of the country, wealth tends to follow. This same principle can be applied to the global economy-countries with a capable workforce will attract the most capital and jobs.
Yet the U.S. ranked 15th in reading, 19th in math and 15th in science among the 28 most highly developed nations in 2000, according to a report from the National Center for Education Statistics.
"In the past we've gotten around the shortcomings of our education system by in effect importing brains," explained Steve Forbes, president and CEO of Forbes, Inc. "Look at our graduate schools; an extremely high proportion are students from overseas. We are like a baseball team that has a lousy farm system, but we're able to get the players we need from other teams."
Reversing The Trend
Business leaders have suggested the key to improving America's schools is to introduce a concept that has helped drive the country's private sector for years: Competition.
"It is no accident that our colleges and universities are so good. They compete," said Leo Melamed, chairman emeritus of the Chicago Mercantile Exchange. "They are competing for the best students and the best teachers. Unfortunately, that is not true in our elementary and high schools where the minimum standard seems to be sufficient," Melamed said. Melamed and others say that interjecting school choice could help change that.
"With choice you get accountability; schools have to demonstrate they are doing right by the students," Forbes said. "Consumers ultimately want the best product and parents want the best for their children. If they have choice…lo and behold, even government-run schools will get their act together because otherwise they lose students and lose money."
Engaging Corporate America
While the majority of business leaders understand the importance of the free market and the impact competition has in the economy, a much smaller percentage supports school choice. Melamed feels that educating these leaders more on school choice will help to change that.
So how does the school choice movement become a priority?
"The message needs to be clear that we are losing ground in competition to other world economies…if the trend continues, it won't be a happy ending," Melamed said.
Forbes is optimistic that as more business leaders are educated on the issue, support for true education reform will grow and school choice will become the status quo.
"I think people will look back and wonder what the fuss was all about," he said.
3 Powerful Tips for Getting into the Right Business for You
Copyright 2006 Tony Mase
In two previous articles, "The #1 Best Business to Get Into if You Want to Get Rich" and "How You Can Find the Financial Success You're Seeking", I answered one of the single most frequently asked questions I'm asked.
Although it's asked in many different ways, the question really boils down to...
What's the best or the "right" business or profession to get into if I want to get rich?
Regardless of how it's asked, my answer is always the same...
A business or profession which you like!
If it uses your strongest abilities, skills, or talents, all the better. If it doesn't, no big deal, you can develop the necessary abilities, skills, or talents as you go along.
Here are three powerful tips for getting into the right business or profession for *you*:
Tip #1 - Take a close look at what you *don't* like to do.
Although I don't generally recommend looking at anything from a negative perspective, there are times when it's helpful and this is one of them.
One of the easiest and fastest ways to narrow your search for the right business or profession for you to get into is to figure out what the wrong business or profession for you to get into would be.
For example...
If the very thought of selling something to someone makes you want to...
Well...
Let's just say...
Throw up...
Then I'd suggest you don't consider any business or profession that involves sales or at least direct sales.
I can tell you from personal experience...
If you get into a business or profession that you don't like, you'll be miserable in the process and ultimately you'll fail.
So...
Why set yourself up for misery and failure ahead of time?
Tip #2 - Take a close look at what you *do* like to do.
It might be something you're doing now or have done in the past to earn money. It might be a hobby or special interest of yours. It could even be related to a class you took in school or a particular subject you're interested in...
Anything...
Absolutely anything!
Remember this...
You can get rich in *any* business or profession.
There are folks right now, right this very moment, who are getting rich in *every* conceivable business and profession...
And so can you!
There's a way or ways you can get rich doing absolutely *anything* you like to do.
Here's a great example...
I know a gal who earns a *serious* full-time income doing exactly what she likes doing better than anything else...
Going to tag sales (also known as garage sales or yard sales depending on where you live) and buying "stuff".
Now...
There's a downside...
She really doesn't like selling her "stuff". She finds the selling process boring and tedious. She gets all her "jollies" from finding and buying her treasures.
So...
How does she possibly make any money?
Simple...
She's developed a rather elaborate network of dealers willing to buy her "stuff" in their specialty areas at wholesale prices from her, consignment shops willing to sell her "stuff" for a percentage of the sale, and she has someone who sells her "stuff" on eBay for her (who, interestingly enough, likes the selling process but doesn't like to go out to find and buy "stuff" to sell) for a percentage of the profits.
Although she makes less money per item doing it this way, she makes far more money in the long run because it allows her to massively do the one thing she likes to do better than anything else...
Going to tag sales and buying "stuff".
Remember...
There's a way or ways you can get rich doing absolutely *anything* you like to do.
Tip #3 - Take a close look at your strengths and weaknesses.
The ideal business or profession for you to get into would be one that you like doing and one that makes use of your strongest abilities, skills, or talents.
However...
Although you should consider them, your abilities, skills, or talents shouldn't be your first consideration when choosing a business or profession for you to get into.
Why?
Two reasons...
First...
There may be all sorts of things you're good at that you don't really like doing all that much.
Second...
There isn't any ability, skill, or talent that you can't develop if you want to.
In his book "The Personal Power Course", Wallace D. Wattles, best known for his classic masterpiece "The Science of Getting Rich", wrote:
"Perhaps the most essential part of wealth-culture consists in finding the place where you will be happy in your work."
When you're "happy in your work" your work ceases to be work and it becomes fun.
Your "fun" combined with constructive thought and constructive action can make you rich!