How to Start Successful Wholesale Stores

Starting a wholesale store is a great way to make a profit if you are familiar with the wholesale industry.  Unlike traditional retailers that sell single units at market prices or above, wholesale merchants sell large quantities of products at discounted prices.  Before you start your own wholesale business, choose the type of merchandise you want to sell, and set up your business operations.

1. Choose your product niche.  Wholesale distributors can carry a wide range of products, but it’s a good idea to focus on just one type of merchandise until you gain experience and improve you negotiation skills.  Research current market trends to find out which items are in demand.  Focus on products that you are familiar with, so you can spot great deals easily.


2. Fulfill the legal requirement for starting a wholesale business in your area.  You may need to obtain a business license, an employer identification number (EIN) and permits pertaining to the wholesale industry such as a resale permit.  Call the U.S. Small Business Administration (SBA) to learn about the laws and regulations in your area.


3. Set up a storage space for your merchandise.  Wholesalers need large storage spaces because they sell products in very large quantities.  You’ll need to buy or rent a commercial warehouse that is big enough to accommodate your inventory.  If you plan to buy a warehouse, purchase a larger one than you currently need to leave room for business expansion in the future.


4. Buy your merchandise.  You must be able to purchase your products at a very large discount in order to make a profit.  The best way to maximize your profits is to purchase directly from the manufacturer.  Try to work out an agreement with factories and manufacturers to take surplus merchandise or large quantities of products at distributor discount prices.  You can also look at auction sites to find deals on products you can resell at higher prices.  Be prepared to purchase and transport very large amounts of products to get the best profit margin.