While the business of wholesaling can result in tremendous profits, there are a number of factors to consider prior to simply beginning your company. From surveying and understanding your potential market to weighing cost factors and margins to finding a product niche that suits you and your competitive needs, there are a plethora of elements to analyze as you get started.
With so many product markets seemingly becoming increasingly over-saturated, it can be challenging to find a niche that has the bandwidth to accompany yet another fresh, new idea. However, this shouldn’t deter up and coming wholesalers from overcoming potential obstacles. Do your research and get a firm grasp on your competitive landscape. Closely monitor what competitors are doing, including concepts that have worked as well as those that have not. See if you can modify any of the less successful ideas and transform them into top-selling products. Investigate ways that will enable your line of products to stand apart from the rest. Understand what your target audience is looking for and how you may be able to modify existing products so that they more effectively appeal to your consumer base.
Does a particular product category boast more potential in terms of margin, revenues, and profits? If you’re fortunate enough to have the option to choose among several various product categories, then profit margin is what you should use as your determining factor. Because it can be difficult to differentiate your product offering from those of competitors, you’ll want to ensure that you’re earning money with the items that you’re able to sell – particularly with those items that virtually sell themselves. Further, ensure that your total costs are significantly less than the amount of which you can realistically sell a high volume of product.
While you may not be able to create a totally unique product, it’s important that your offering boasts distinct features unique to your mission. Find products that can be and distributors that are willing to drop ship so that you can reduce your overhead costs. Moreover, ensure that there is substantial demand for your products and services. If there isn’t a distinct market need for what you’re hoping to sell, then cut your losses immediately, and develop an alternative business plan. Adding a new facet to a standard, convenient product can add to its resale value.
Despite your specific financial goals, it’s important to understand your market before you move forward with developing your business plan and just jumping into a product category. Make sure that you can identify potential pitfalls and drawbacks and immediately strategize ways to prevent these issues from affecting your future successes. Perhaps most importantly, refrain from spreading your resources too thin. While you may see potential in selling a vast variety of products, it’s best to start with one targeted niche and to work on expanding from there.