Forums: Discussions for entrepreneurs and small business.

Hi all,

The business I would like to start is a wholesale (sole proprietor) business, as I would rather deal with distributors than retail customers, having worked for both types of businesses in the past. Can anyone offer any advice or information that would be different for wholesale vs. retail, other than the profit margins are smaller? I would be manufacturing a few small furniture items.

Thanks,

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Lisa

one thing: depending upon your products, you might be able to get some pre-orders (at discount or with some other payment incentive). this could help you finance your initial build of product. can`t do that in B2C (retail) businesses.

talk to as many of the targeted retailers as possible so you`re smart about which products to make, in what quantity, and how to price them.

that`s a starter, but i`m sure there will be other / better ideas that follow from here!

 

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Rich Sloan , Co-Founder, Chief Startupologist, StartupNation

My advice would be to take the "no customer is too small" approach as appropriate.  I work with wholesalers in the Scrapbook industry and many of them won`t give my group the time of day because we (meaing our member businesses) are "too small".  But, as so many actual scrapbook store fronts are crashing and burning (due largely to poor management - loving to scrapbook is NOT the number one qualification for opening a scrapbook supply store as most people believe) we are the "tortoises" to the scrapbook store "hares". 

Many of our members are home-based and according to our internal research, many of them have had several stores open and close around them since they opened their own business.  They might not be ordering as much on a monthly basis, but they will probably be around LONGER than an actual store because they have more financial flexibility due to less debt and can adapt to our ever-changing fad-based industry (the scrapbook industry is very much like the fashion industry - it`s faddish and seasonal).  So, we appreciate the vendors who understand that $300 a month orders for 10 years is worth MORE than $1000 a month orders from a store that starts and stops almost overnight.  You have to look at the lifetime value of a customer and consider that smaller customers can ultimately be your BEST customers over the long term.  As we like to say at ScrapBiz, "our money is as green as anyone elses" - LOL

~Kim

Thanks everyone, I was thinking along the lines of stocking and selling around 200-300 items per month, with my average order of a quantity of 4-20, not huge amounts. I just want to deal with a few regular stores rather than hundreds of individual one-time buyers. I plan on having only 5 products - trying to keep it simple. I`m still on step one of this 10 step program, will continue to post progress updates.

Thanks again,

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Lisa

right, there are differences in those two types of client relationships...i`ve done telemarketing in both comercial-to-commercial and residential, so i can say with confidence that modes of communication are important. with corporate you might look for hot buttons that relate to sourcing issues - unit of measures, sizing and costs. also, you might want to consider what the competition is doing right and wrong - and how you are able to out shine them. i`ve worked for forty different companies and the pressure is always on!! be proactive vs. reactive in making positive connections - ask them how they are doing today, and be yourself!! let your product strengths do the best talking.

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I am no longer posting on this forum. A fellow citizen here suggested that I should Think before I add commitary to my postings. I thought he was wrong, but I am mistaked(not everyone digs Mr.Wicks) E