How to Become a Wholesale Supplier

Wholesale suppliers act as the conduit between product manufacturers and retailers.

A wholesale supplier is a company or individual who serves as the middleman between product manufacturers and retail sales outlets. A supplier brokers the sales of wholesale goods and merchandise. Wholesalers generally deal with retail stores and other outlets and do not often sell items directly to individual customers. In order to become a successful wholesale supplier, either full-time or part-time, you will need several business skills. You can further develop these skills as your experience increases.

Instructions

1. Obtain training courses to improve your business skills and understand the economic forces in the market that drive the wholesale world. Contact your local branch of the Small Business Association (SBA) for free lectures and assistance.

2. Determine the products you wish to handle as a wholesaler and find out their specific business or industry category. Decide this based on your personal knowledge and interests. For example, if you are a genius in video games, you may be most interested in becoming a wholesale electronics or video games supplier.

3. Get the current wholesale practices and rates, the current retail rates, shipping rates and overhead costs for products in your industry. This analysis will help you to identify the product with the highest profit potential. Talk to manufacturers and other wholesalers in your specific industry for pricing information.

4. Write a business plan providing details regarding how you plan to start the business, what products you plan to supply, how much product you expect to move, who you expect to move the products to, what costs you will incur at each step, what profits you expect to realize in the future, what funding sources you have to provide start-up capital, what investment you intend to make from your own resources, whether you need extra staff or professionals, what opportunities and threats you face in the current economy, what actions of your competitors can affect your business, and what core competencies you possess over your competitors.

5. Obtain a federal tax ID number and other relevant permits or licenses in your state. Get a vendor's license if you plan to sell the products directly to consumers. Contact the Internal Revenue Service (IRS) for your Tax ID. Having this number will help you to get a business bank account and will give you a business identity that allows you to file your taxes separately from your personal income. Consult your state's official website to find procedures and requirements for obtaining a vendor's license.

6. Contact the manufacturers and request an appointment. Give a good presentation about your business and state the advantages that the manufacturers gain in using your services. Since it is tough to contact manufacturers without prior experience, you can start developing a network and attend meetings or events related to your products.

Tips & Warnings

• Participate actively in discussion forums related to your product category. List your information in telephone directories to obtain retailers.

• Stick to your product category and do not venture into many different product areas until you develop your business.

References

• wholesalesuppliers: Wholesale distributor
• Ideamarketers: How to Become a Supplier or a Distributor