starting up your own wholesalers
my first post here so please bear with me…
i’ve been working at a company for many years now and have found myself dealing with many different wholesalers at the same time, seeing stock move from one to another. this made me think why couldn’t i get a slice of the action and set up my own wholesalers and make some profit for myself that way? i’ve got plenty of contacts so sourcing wouldn’t be a problem. the only stumbling block is how to start it up?
since i have no money at the moment, i thought the way i could start up the business was to offer the stock to companies i’ve not actually bought myself, but if they’re interested i could get money off them up front and then pay for stock with that money…
does anybody know of a website with rules and regulations of how to run a wholesalers as despite startups is a great website, i can’t find anything on here (please correct me if i’m wrong!!)
i’d appreciate any kind of feedback for this, as at the moment this is purely a thought of mine over a pint at the pub!
thanks in advance
Originally posted by: kezmarki thought the way i could start up the business was to offer the stock to companies i’ve not actually bought myself, but if they’re interested i could get money off them up front and then pay for stock with that money
The obvious question is why would companies who buy stock from wholesalers on monthly account terms transfer their allegiance to someone who they will have to pay up front and doesn’t have the stock to hand.
factoring , invoice discounting and trade finance specialist broker. Founder member of Independent Factoring Brokers Association
very good point ian – thanks
through my experience not all companies know every supplier/wholesaler. for instance there’s companies i deal with currently that don’t know each other, and other companies don’t know about me.
plus the business i’m talking about have very long turnaround times (sometimes as long as 3-4 weeks) so the people who urgently require stock that i have ready to ship will come to me as a short term fix. (i know this to be true – my experience!)
at the end of the day, all i’m thinking is that i could match up the loose ends that i know about and make some money out of that, plus once i get into the market, i’ll hear of new potential customers through word of mouth. at the moment i have good relationships with loads of places, so my experience will help this…
I have to say that I think Ian Js comments are spot on. I buy wholesale for my business and at least I expect 30 days credit – this gives me a chance to raise money from the goods before I have to pay for them – that’s business. The only time I’d deal with a company that wouldn’t give me credit is when I need something quickly that the other guys can’t supply in the timescales. The key word there is quickly – and your m.o. wouldn’t allow that.
I would think your best way forward would be to arrange credit with all these existing wholesalers so that you could offer a degree of credit to your potential customers. Don’t forget that if giving credit you need to have credit agreements in place with your customers. Also, plan what you’d do if your customer didn’t pay up but you still had to pay your supplier? Invoice Factoring might be a worthwhile option.
Finally… To make good margins in wholesale you need be looking at getting your supplies from manufacturers, not other wholesalers – after all, the other wholesalers have already taken their cut which is going to have a major effect on your end selling price.
If we are starting up in business then we must be business-like.
A half-baked idea is less benefit than a half baked-bean.