The Reality and the Fallacy of Buying Wholesale
In my sort of business, I frequently get many messages from new online retail owners who searching for wholesalers offering rates that are competitive and the most up-to-date products of popular brands that is in high demand today.
You might think that this daunting search by potential online owner is just a dream and should quit while they are ahead but there is a lot of optimism nevertheless.
The fallacy that needs to be addressed for new online retailers is to recognize the mechanics of various consumer markets and the scope of their opportunities afforded by their limits of their principal investment, and then devise their plan accordingly for their business.
Look for my next commentary where I discuss several outstanding options for those with smaller budgets and restricted funds.
But first, let us go over some key ways of distribution.
Popular Brands Fiercely Guard Their Reputation Branding a product is how successful companies promote their business and the reputation.
First, take a look at how some successful brands that are at the top of the consumer markets control their distribution funnels.
Companies invest a lot of time and money to get their highly popular brand names established as household names.
Justifiably, they often establish very stringent policy with their distribution channel to guard the reputation of not only their brand name product but also even more importantly their company image.
Dealing with other retailers that would carry their brand is selective to minimize the risks of associating with a below standard sellers who could mar their reputation.
Authorized Retailers You can go to many of the popular brand names and apply to become an authorized retailer.
This is how many successful businesses control directly their distribution channel If you meet their application requirements they will only sell their products to authorized retailers.
Some of the common requirements for an authorized retailer are: 1.
Ordering a sizable sales volume minimum 2.
A physical local such as a store and not just an online presence 3.
A recognized record of retail sales and excellent credit history 4.
Reliable vendors recommendations that can vouch for your business Private Retailers Need Not Apply There are some very specialty companies that opt to be their own only vendor and do not distribute to private retailers to sell their products.
Those who work this way often own their own retail shops and online retail websites and are usually still in its infancy of developing their own brand and reputation.
While seldom would you find such owners, there are companies who will not permit an independent to carry their products unless it is a special arrangement like a charity event or promotion.
Wholesalers Requirements Are Strict Some brands agree to many wholesalers to manage distribution to retailers without being directly involved with their distribution channels.
Nevertheless, even when they are not part of the process of controlling the distribution, policies are established for wholesalers to strictly comply.
Often these policies are much the same to the policies for authorized retailers as described previously.
Do Call the Manufacturer As Part Of Your Research Unfortunately the company with distribution channel with any of these levels of control are very restrictive and more often than not refuses smaller volume wholesale purchases.
Eliminating distribution access to new small businesses with narrow resources is often the most discouraging aspect for start-ups.
But with perseverance and determination this can be overcome by simply making a quick phone call and make your inquiries directly with the brand manufacturer or retailer about their distribution policy.
This is best counsel I can offer a potential retailer.
You will probably save countless time, effort and frustration by calling the sales or public relations branch prior to extending a lot of time searching wholesalers for their brand products.
If you are successful in establishing a good rapport with the manufacturer, you are sure that you will obtain high quality goods from the authentic source.
The vision of owning an online retail store and become financially independent is not out of reach for the average small retailer.
It does mean that you have to be more resilient and inventive.
Look for my next article where I will discuss other more accessible alternatives for the middle-of-the-road of online retailers that have a limited foundation of resource capital that any manufacturer would consider as an authorized reseller.
For those considering new businesses, the latest products on the market of hottest name brands may not be an option however until then, do your research by contacting manufacturers and other wholesalers about their distribution policies, look for other options.
May your business ventures always have good fortune.