Like most businesses, starting a wholesale distribution business has its ups and downs. The first two years of your wholesale distributorship’s existence will be the “learning” years, when you experience the ups and downs of being a new business owner in a new industry. The good news is there are plenty of successful wholesale distributers who are willing to share some advice on how to succeed in the business.
As a wholesaler, you play the role of the middleman between manufacturer and distributor. In this role it will be up to you to make things run smoothly from start to finish. You’re helping the manufacturer get its products to market, and you’re helping the customer obtain the products he or she needs to run a business. Being in the middle makes it easy to overextend credit to customers, this is a mistake that should be avoided at all costs. You can avoid this by being diligent about checking credit references, meticulous when explaining your payment terms to new customers, and careful about not letting your receivables become too old, or “aged.”
Another common mistake that wholesalers of get caught up in is not keeping good timing between receipt of a customer order and receipt of the goods from the manufacturer or supplier. To get through these kinds of timing issues one must make it clear to suppliers that late deliveries are unacceptable while at the same time providing realistic time frames to the customers. Making sure your staff is aware of the importance of customer service also goes a long way.
Like many businesses, wholesale distributors also need to know their customers. New and growing distributors need to pay attention to consumer tastes and buying shifts—both of which can quickly derail even the best laid business plans.
Being a successful wholesale distributer is much like any other business, just give the customers what they want, and you’ll be fine.