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How Wholesale Platforms Give Small Businesses Big-Company Clout

Never thought about the advantages of joining forces with wholesalers? Check out the following benefits that can come if you find the right wholesaling fit.

As an entrepreneur, you’re bound to start small when it comes to launching a business. However, you probably don’t want to stay small for long. That’s why you plan for growth.

Photo: Austin Andrukaitis, CEO of ChamberofCommerce.com | Source: Courtesy Photo
Photo: Austin Andrukaitis, CEO of ChamberofCommerce.com | Source: Courtesy Photo

There’s just one stumbling block: it can be tough to compete. You may have a nimble team ready to disrupt your industry, but you probably can’t access unlimited capital. As a result, you have to get creative when it comes to making the most of every dollar.

One method to stretch your money and give your company more clout and positioning is by working with wholesalers. The right wholesale partnership can help you become more successful much faster. And you won’t have to dive into the red to eventually make more green.

Never thought about the advantages of joining forces with wholesalers? Check out the following benefits that can come if you find the right wholesaling fit.


1. Improve your margins

In many industries, margins can be tight. Working with a wholesaler can help you not just bring up your margins but also provide more unique, trendy merchandise to consumers. Let’s say you’re a brick-and-mortar or e-commerce clothing retailer targeting female adult shoppers. Rather than having to pay top dollar for everything you sell, you could work with a women’s wholesale apparel marketplace. This would enable you to purchase top-line, designer-label clothes and accessories in bulk lots from one platform. In turn, you could resell the merchandise at the manufacturer’s suggested retail price.

Even if you move the needle just a few percentage points on your margins, you can make a difference in net profits. Plus, you may be able to purchase higher volumes of wholesale items in the future. Again, this could serve to lower your cost-per-good price further.


2. Be more hands-off with your product supply chain

Managing the entire product supply chain can be difficult, particularly if you have limited financial and human resources. Trying to source all the raw ingredients and follow the manufacturing process takes a lot of time. It also forces you to absorb inventory risks and costs like theft and spoilage.

Not ready to deal with the logistics involved with being hands-on with your supply chain? You can probably find a wholesaler that can. Wholesalers are designed to take on a lot of the details that would bog down your workflows. As a result, you can focus on marketing, sales, and customer service.

To be sure, you may still want to exercise some control over the supply chain. Case in point: You want to sell products that have been produced in ethically-operated workplaces. Therefore, if your wholesaler switches suppliers, you will want to ensure the new supplier meets your standards. If not, you may have to proceed with a different wholesaler.


3. Avoid paying for warehousing

Storing items can become a fiscal burden on a small business. Sure, the Internet is filled with stories of young companies starting up in a garage or keeping inventory in a home basement. But the reality of managing inventory is far less exciting, especially if you’re renting a lot of space.

Many wholesalers will keep your inventory at their site until it’s been ordered. Though you’ll pay for all the merchandise, you won’t have it shipped to your door. Instead, it will be waiting until your buyers purchase it. At that point, the wholesaler will send it. You’ll pay the wholesaler for this service, of course. Still, it can be a lot less expensive than trying to store everything yourself.

Don’t forget that your wholesaler may use advanced technology to make this process even easier. With the right software integrated into your sales or e-commerce platform, you could enable shipments automatically. Your support team could also see where shipments are, which helps them provide a better customer experience.


4. Lower the risk of expanding your product line

Adding more products to your existing lineup can be a great way to grow. At the same time, it’s hardly a surefire recipe to succeed. Sometimes, product expansions can end up flopping. Consequently, you’ll want to put measures in place to take on as little risk as you can.

When you work with a wholesaler, you can often gain quick access to products that correlate to your current offerings. As an example, you might sell a lot of seasonal merchandise. You’d like to add quality scented candles to your store. However, you’re not sure if your existing customers will buy them. After some deliberation, your sales and marketing teams decide to sell a limited number of candles in the fall.

In this circumstance, you would work with your wholesaler to purchase the wholesaler’s minimum requirement of candles. If the candles sold out, you could go back to the wholesaler to buy another 50, 100, 1000, etc. But you wouldn’t be burdened with an abundance of unsold candles sitting in your back room.


5. Create the appearance of being a larger company

You’ve probably heard the old saying that perception is reality. When you resell items sourced from a wholesaler, you can make your business seem much larger. This can lead consumers to feel more comfortable buying from you instead of another seller.

Remember that you’re not locked into working with just one wholesaler, either. You can partner with several to present an impressive online or traditional store filled with merchandise. And you can do it from a centralized location or, in the case of e-commerce, with your whole team working from home.

Just keep one thing in mind: Choose the merchandise you sell carefully. Your store will have a more put-together appearance and theme. Plus, you’ll be better able to target buyers if your goods fall into a certain category, such as teen apparel, organic foods, or natural makeup.

Is a serious growth spurt part of your near-future business plan? Consider reaching out to wholesalers and making some your partners. They might be the missing link between staying where you are and moving into the lead.


Austin Andrukaitis is an experienced digital marketing strategist with more than 15 years of experience in creating successful online campaigns. During this time, he’s had the opportunity to work with a wide variety of clients ranging from large Fortune 500 companies to your local small business. Austin’s approach to developing, optimizing, and delivering web based technologies has help businesses achieve higher profit, enhance productivity, and position organizations for accelerated sustained growth.


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