Seven Types of Wholesale Businesses to Consider Starting With

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Finding the right wholesale businesses is not an easy task. It has to fit your goals, capital status, and personality.

There are many types of wholesale businesses. You need to find the right one that fits your style, your character, interests, and personality. This article will help you familiar with different types of wholesale businesses so you can pick the right one for you.

Not all wholesale businesses are created equal. In this article, I’ll go over wholesale businesses that have a relatively easy entry barrier. In other words, you do not need $100 million dollars to start them.

To start with, what is an easy entry barrier in terms of wholesale business? A wholesale business with an easy level of entry is a business that you can start with a reasonable amount of money depending on how large you want to launch the business. For example, if you are a one-person operation you could start it for less than $1,000. When you want to run a large business you can scale the same type of business by adding more inventories, employees, vehicles, warehouses, etc.

I will briefly introduce seven types of wholesale businesses and you will have a basic understanding of different wholesale business types and start choosing your path.

Manufacturing

This one is definitely the hardest one since manufacturing involves the large pre-phase investment, hiring lots of staff, purchasing manufacturing devices, and own unique features to earn a place among the intense competition.

After you manufacture goods you have to build up sales channel to sell products to wholesalers, retailers or directly to the public. This involves wholesale, distribution, and most importantly, sale.

As intimidating as it sounds, it is not always as hard as people imagine. Some company starts with one to two employees and produce refined handcraft products. It will not be a hard thing to do if you know your niche and start wit small.

Importing

Everything about importing spells wholesale. You need to negotiate with overseas manufacturers, transport the products to the States, get brokers to import products, warehouse goods, and sell and ship products to your wholesale or retail customers.

Wholesalers

Wholesalers are usually importers or people who buy from importers or manufacturers to sell to other wholesalers or distributors, then normally don’t sell to retail stores. Wholesalers specialize in getting good products and supplying them to wholesale distributors, cash and carry’s and even exporters.

Cash and Carry

Cash and Carry businesses are stores that buy at wholesale prices and sell mostly to very small wholesale distributors or wagon jobbers and to small retail stores like liquor stores or gas stations. They have a warehouse or storefront where customers drive up and buy their products. They usually don’t deliver any products.

Online Sales

Online sales are a large part of the modern wholesale trade. Many wholesalers sell online nowadays. You can add online sales to your business by simply selling your current products from your websites or other websites or you could even start a business around online sales. If you start a business selling online you simply need a good supplier, a decent shopping cart and you also need to accept credit cards. The rest is getting the right people to your site, or marketing.

Brokers

Brokers differ from the other types of distributors in that they normally don’t buy products, they just sell them. They never take possession of the merchandise; they don’t have warehouses, trucks and many times don’t even have offices. They just sell and get the commission from the sales. Being a broker is perfect for someone without a lot of money to buy products or someone with great contacts in a particular industry. For example, if you work or used to work at a large retail store you can use your contacts to sell products from other companies. You then get anywhere from 1% to 10% of the sales depending on the type of merchandise.

Wholesale Distributors

Wholesale Distributors can be manufacturers or importers too. Wholesale Distributors tend to sell to several customers including wholesalers and retailers. They are the most popular type of wholesaler and usually sell everything including food, beverage, consumer goods, cars, chemicals, and most products out there. They can have warehouses and trucks or drop ship products. They can sell to restaurants, manufacturing plants, retail stores, governments or to other wholesalers.