Choose the Best Distribution Business for you
Learn everything you need to know about Wholesale Distribution and Sales Channels from Jorge Olson at www.LearnWholesale.com and visit Jorge’s website to learn Marketing and Business Strategy at www.JorgeOlson.com
When you are selling products through different channels you have to know your customers and how they sell and what they sell. While you want to be able to provide as many customers as many products as you can – you can't sell everything. By learning about the various kinds of wholesale distributors that there are, you can find out where you may be able to step into the business.
This article will focus on the two most basic forms of distribution or channels; the ones that sell to the "end user" and the ones that sell to use by other businesses. Those that sell consumer products are much greater in number and are often where many people begin their wholesale business. Those that sell consumer products act as a go between for retailers and the manufacturers of the products. In the industrial wholesale business, you would act as the intermediary for manufacturers and industry service providers.
Consumer goods wholesalers might work with products such as apparel, jewelry, beauty products, shoes, and electronics. Products such as food and beverages are great consumer products that you can sell direct or through distribution and sales channels. These are generally the products that you find in stores and online. A customer would be able to simply go to the retailers that you are selling these items to, and then purchase the items. You would also see these kinds of products on Internet auction sites – such as eBay.
Industrial or "business to business" goods are larger profit items, but also require more effort on the wholesaler's part. Products could be raw materials, chemicals, production or manufacturing equipment, etc. Items such as building supplies or manufacturing raw materials can also be part of this category. You could also establish a motor vehicle parts business or work with petroleum products. Likewise, you could also sell lumber and other construction necessities. These items tend to be larger in quantity as well as size, requiring the wholesaler to have a larger storage space as well as equipment to move them from their warehouse to the retailer.
While the industrial goods wholesale business requires more effort, it will also reap a larger profit. However, it can be confusing when you are first establishing yourself as a wholesaler. With such large and complicated items, you may not feel as confident at pricing the products or even relating information to the retailers. If you are just starting a business you could start with nitch products that are more difficult to find, that way you are not competing in price and inventory will not be an issue. And once you begin to make a profit from your initial business, then you can move into the larger goods.
If you already have a background in larger goods, you may find that dealing with retailers that want to purchase these kinds of goods is an easier task than most. This type of sales is usually called "solution sales" because for larger, more expensive goods you need knowhow for implementation or training.
No matter what kind of products you sell or what kind of channel you target you always have to learn and know all distribution and sales channels. Try to learn as much as you can about your customers. It does not matter if they are a manufacturer, a distributor, retailer or the end user. Channels such as convenience stores, supermarkets, beverage distributors, cash and carry, OEM's, etc.
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