When people first become aware of the possibilities of wholesale distribution, they frequently get lured in by the radically cheap prices and massive variation of available products. It’s understandable; the products are of equal quality to those sold in high street shops, yet are so much cheaper that it seems almost foolish not to invest in as much as possible! However, this is the most common mistake that wholesaledistributors can make; investing in a fantastic-looking deal, just to find that they have a huge quantity of random stock that they’re unsure how to shift! The simple truth is that, no matter how good a deal you can get on a product, you’re not going to make any money from it if there is no demand for it! You could buy five hundred minidisk players for 50p each, for example, but wind up losing hundreds of pounds because you haven’t realised they are obsolete! The key is finding hungry markets; niches in which there are high demands for products you can get at a low price. Lots of people want brand new DVDs, but nobody wants sixty copies of the latest James Bond offering – people want their DVD to be cheap and that’s where you step in. There’s no use having lots of useless products that nobody will buy from you, no matter how cheaply you may have got them! Even getting products for free can sometimes cost you more in distribution that you’ll earn in sales! The key is to success as a wholesaledistributor is finding your market before your product – not the other way around. A guaranteed market is guaranteed sales; guaranteed stock alone is nothing more than guaranteed problems! Hence, the most important thing a wholesale distributor can spend their time doing is market research; discovering what is selling well, where is it selling well and where it can be found cheaply. It sounds like an obvious point to make, but do not be fooled into think that effective market research is easy to conduct, just because it is a simple concept. This kind of research is much more than identifying your target industry; industries are huge – it’s incredibly hard for a small wholesale distributor to stay afloat in such vast seas, filled as they are with giant cooperate battleships! There are thousands of companies selling TVs, for example – you will have to fight them all for every sale you ever make as a TV-distributor! Instead, consider concentrating on finding specific niche markets within a hungry industry; instead of clothes try women’s summer clothes; instead of electronics try flat-screen computer monitors; instead of music try rock n’ roll CD and vinyl I know from experience how tempting it is to dive into a catalogue, make a few calls and fill your warehouse with hundreds of pallets of things that you think are brilliant and that everybody should want. This is not, however, a good way to make money. No matter how much you may love candles, other people just might not be as into them as you are – find out what the people want before you try and sell it to them!
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When people first become aware of the possibilities of wholesale distribution, they frequently get lured in by the radically cheap prices and massive variation of available products. It’s understandable; the products are of equal quality to those sold in high street shops, yet are so much cheaper that it seems almost foolish not to invest in as much as possible! However, sometimes they are cheap for good reason - you must research your market and ensure there will be enough demand for the produ
Laurence Butcher buys failing wholesale distribution companies, puts them back on track and sells them on. For more information about wholesale products, he recommends visiting http://www.wholesaleclearance.co.uk/
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