Wholesale business is a special field of activity with its own unique specifics. To achieve excellent results and receive a stable income, you need to know this specificity perfectly. Many entrepreneurs view the wholesale business as an opportunity to earn good money without much effort, and they are one hundred percent right.
You will learn:
- What is a wholesale business
- What are the advantages and disadvantages of a wholesale business?
- What are the different types of wholesale sales?
- How to organize a wholesale business
- Do you need investments to start a wholesale business?
- What mistakes are most often made when starting a wholesale business?
What is a wholesale business
Wholesale trade as a business is the purchase of products in large quantities from a supplier or manufacturer (less often) for its subsequent sale in small quantities. That is, the product is not purchased by the end consumer, but by a business representative, in order to subsequently resell it or use it for production needs. Of course, the wholesale business occupies far from the last place in the issue of economic relations between production sectors, goods manufacturers and companies engaged in retail trade.
Ambitious aspiring entrepreneurs are often faced with the problem of choosing between wholesale and retail trade. Each industry has its own advantages and disadvantages. The choice can be made only after carefully analyzing each of them.
To achieve heights in retail trade, you need:
- To find the appropriate premises, in order to ensure the competitiveness of the enterprise, the location must be “advantageous” and passable.
- Have enough money to buy the premises/pay rent, as well as purchase goods.
- Have the necessary financial resources to adequately pay staff.
- Allocate funds for advertising and further promotion of the enterprise.
To organize a wholesale business you should:
- Select one or more reliable suppliers.
- Conclude agreements with stores where the goods will be sold.
- Choose a method for transporting goods (you can rent or purchase trucks in the required quantity).
- Find staff.
How to increase profits for a wholesale business
Wholesale trade companies are “sandwiched” between suppliers and buyers, who themselves are faced with all the problems of the crisis period. How to build sales so that counterparties are happy, and this only benefits the company? Check out seven solutions that have helped wholesalers not only maintain, but raise the bar. You will find them in the article in the “Commercial Director” magazine.
What are the different types of wholesale trade?
Two main forms of wholesale trade:
- No need to advertise the enterprise - enough create a client base retail partners.
- The ability to not focus on the location of a wholesale warehouse or enterprise, unlike retail stores. The wholesale base can be located in any place convenient for you.
- The amounts of wholesale transactions and contracts are significantly higher than retail ones.
- Wide area for selling goods.
- The ability to enter into many contracts with large manufacturers, including regional ones, since they are the ones who often resort to the services of wholesale enterprises.
- A chance to sell the most profitable types of products, such as tobacco products, alcohol, semi-finished products; Retail companies must create an extensive product range in order to satisfy all consumer needs.
- Saving on purchasing wholesale goods - this allows you to set the retail price of your products.
- Strict regulation of the terms of purchase and sale of goods by agreement between wholesale trade enterprises and retail firms; Thanks to the drawn up agreement, the possibility of disagreements and conflicts between organizations is practically eliminated.
- Receiving payment for goods immediately after delivery - the wholesale supplier does not wait until it is sold.
- Taxation rules for wholesale trade, according to the legislation of the Russian Federation, are quite simple. Retail enterprises are subject to a Unified Tax on Temporary Income, while wholesale companies must pay contributions in accordance with the OSN or STS (General or Simplified Taxation System), which is much more convenient.
- Direct cooperation with experienced buyers who are interested in low product prices and are constantly trying to reduce costs.
- Requests from buyers for maximum deferment of payments.
- Endless debts from buyers and, as a consequence, an increase in overdue accounts receivable.
- Competitors regularly sell goods at reduced prices, which affects the quality of the products.
- Incoming demands from customers to fulfill their conditions (for example, sticking special labels on goods, delivering products at a certain time in small quantities, using Euro pallets for delivery, and many others).
- Lack of control points over the work of managers in the sales department.
- Disruption of interaction in departments of the company, which causes disruptions and delays in deliveries.
- Lack of effect from advertising that does not promote products.
- Introduction of huge fines for failure to comply with certain conditions under supply contracts.
- Periodic “turnover” of clients, some of whom go bankrupt, others make a choice in favor of other suppliers.
- Transit. Provides for the delivery of products to retail points directly without removal to a wholesale warehouse. The main advantage of this form is the higher speed of trade turnover and product safety.
- Warehouse. Products are sold from warehouse. The form, which is by far the most common, allows you to prepare goods before sale and supply retail outlets with small quantities of the products that are currently required
Wholesale outlets differentiate themselves by the breadth of their product range:
- A specialized (narrow) assortment implies the presence of less than 200 items.
- A “limited” assortment is considered to be items with quantities of less than 1,000.
- A wide range - from 1 to 100 thousand items.
By size of turnover, wholesalers are small, medium and large.
By delivery method: goods are delivered to points by company vehicles or company employees. It is also possible to issue products directly from the warehouse.
There are several distribution systems - exclusive, selective and intensive. Your business will be organized on one of these systems.
If the activity is based on an exclusive system, the manufacturer must issue a trading license according to the conditions franchising. The number of intermediaries is minimal. In a selective system, which also includes a wholesale business, the organization and the manufacturer enter into distribution agreements. In this case, technically complex goods are usually subject to sale. An intensive distribution system implies the presence of a large number of intermediaries and wholesale companies.
Is it possible to start a wholesale business without investment?
Wholesale business without investment is real. Entrance to it is possible in the absence of funds. All a person who wants to work and earn money needs is a telephone connection, open access to the Internet and a focus on results. You can approach the question with a grain of salt, saying that all the niches have already been occupied, but there is no start-up capital. But the advantage of a wholesale business is that it does not require financial investments. You need to be outgoing, confident and smart.
This option will appeal to those new to business.
3 myths about the wholesale business
- “The retail buyer can find the supplier himself.” There are often cases when, despite sufficiently efficient operation, an enterprise does not receive a full profit. The reason may lie in the supplier’s inability or unwillingness to promote itself. The majority of the category of people who reject the Internet, Yandex.Direct and other advertising channels are men over the age of 50 who started their business back in the 90s. The buyer, of course, can find the supplier himself. But it is worth taking into account the large territory of our country and the large volumes of consumed wholesale products. In any case, not every entrepreneur manages to sell the maximum amount of products. The main task of the wholesale business is to help suppliers sell goods on a huge scale.
- “If I bring a supplier and a client together, they will carry out everything themselves, and they will cheat me.” You can eliminate such an unpleasant situation by concluding an agency agreement. The likelihood of being scammed will be reduced to zero. The essence of the agreement is that when you find customers for the supplier, you will receive a percentage of the volume of goods sold. In this situation, it is not profitable for the supplier to terminate the business relationship with you, since it is in his interests to regularly sell the products, in which you help him.
- “Getting wholesale customers is very difficult.” Entrepreneurs involved in the wholesale business often find clients through online advertisements. Yandex.Direct contextual advertising is also a very effective business tool. Thanks to a simple algorithm, even a novice businessman can create a good sales ad that will help attract customers. At the moment, a number of holdings and large companies are searching for suppliers on the Internet. However, many entrepreneurs reject this option, which is very beneficial for savvy beginning intermediaries. Cold calling and the work of highly qualified sales managers play an important role in attracting clients.
How to open a wholesale business
Stage 1. Market analysis and identification of the most liquid (fast-selling) goods. To identify and predict the most popular wholesale options, there is absolutely no need to dive into a deep study of all existing offers. Pay attention to food products: flour, granulated sugar, butter, baby food, canned food. All these products allow you to start a wholesale business without investment. Just agree on cooperation with an inexpensive manufacturer, and that’s it.
Stage 2. Choosing a niche. Think about what niche you would like to occupy. The easiest option is to work with small wholesale batches. If you decide to open a wholesale business from scratch, this will allow you to gain valuable skills in concluding contracts and determining how to make a profit.
Stage 3. Selecting a product group. When choosing products to sell, consider several important components:
- Give preference to the product group in which you are well versed. For example, if you received your education at a forestry engineering institute, focus on wood processing products. At the same time, for a person who has a great desire to develop, there are no boundaries. Even without the appropriate education, it is quite possible to understand the products of any industry.
- Analyze what products are available on the local market, what products are in greatest demand, pay attention to the pricing process, find out which regions act as suppliers. Next, find a manufacturer from whom you can sell similar products at reduced prices and offer potential consumers to sell them in bulk.
- When selecting products by category, make a choice in favor of those products whose sales do not depend on the time of year, weather conditions and other similar factors. It is also not worth purchasing perishable products. When starting a business, do not take into account exclusive products that are popular among a limited circle of buyers.
Stage 4. Selection of storage space. Before setting up a wholesale business, select storage space. Its absence can become a significant problem. Many entrepreneurs are now saying that, both in megacities and small towns and villages, there is a shortage of warehouses. That is why rent costs a large sum, especially if the area is large and the location of the premises is good. When organizing a wholesale business, remember that you need to rent or purchase warehouses after you have chosen the products for sale. This is due to the fact that the storage conditions, for example, of household appliances differ significantly from the principles of storing dairy products.
Consider buying and renting a space. Perhaps building a warehouse will be a much more profitable undertaking than paying monthly rent. The construction of a prefabricated warehouse has long ceased to be a difficult task - all the conditions for organizing such a premises exist. Also consider purchasing or renting shelving, refrigerators, and other equipment to keep your warehouse running smoothly.
Stage 5. Finding a supplier is a key point in organizing wholesale trade. Of course, it is better if the manufacturer works in close proximity to you. Find people who make products and are interested in selling them quickly. Such an enterprise or company could be a furniture factory or a dairy plant with reasonable prices. In this case, you should not have any difficulties with delivery - and this is also a huge plus.
Often large-scale federal-level manufacturers work with many wholesalers or regional dealers. As a result, a long “chain” of sales goes through several wholesale outlets. It all depends on the number of competing companies in the trading industry, the level of demand for the product and the volume of the retail market. Products always reach retail outlets through wholesale, and only then sales begin.
Material for download:
When choosing a group of products for wholesale distribution, remember that a wide range of products always helps generate income. Increasing the volume of supplies and contracts with partners is a gradual process.
Finding a manufacturer who does not currently have a company through which you can purchase goods in bulk is not an easy task. But it is in the interests of manufacturers and large suppliers to have long-term cooperation with the wholesale business, and therefore its representatives are always offered bonuses and discounts. Direct cooperation with manufacturers without intermediaries allows you to significantly save money.
Stage 6. Hiring staff. Interaction with sales representatives plays an important role in organizing a wholesale business. The main task of the representatives is to find the largest number of retail outlets that will undertake the sale of certain products. You usually need to pay for goods either immediately or after they are sold in the store. Sometimes sales representatives also act as forwarders, delivering products to points of sale, handling paperwork and issuing goods. A sales representative is a key link in any chain, since it is he who finds potential customers, enters into supply agreements and works directly with store employees.
In the work of a wholesale organization, not only the sales representative is important. You must establish cooperation with a PC operator who will process applications, an accountant, a storekeeper, a cashier and a driver.
Stage 7. Purchase of transport. Ideally, you should buy a car. But if you don’t have this opportunity yet, you can rent a vehicle or find drivers who already have their own personal cargo transport. If you plan to sell products in large volumes, buy a forklift.
How to open a branch of a wholesale business in the region
Every wholesaler sooner or later faces the question of building a distribution system in the regions. How to most effectively promote your products hundreds of kilometers from your head office? How to minimize risks and logistics costs? How to keep your brand reputation under control? The magazine "Commercial Director" answers all these questions in its article.
What kind of agreement should I conclude with the supplier?
An agency agreement is concluded between a businessman engaged in wholesale trade and a supplier. It provides for the responsibilities of each party and ensures their mutually beneficial relationship. According to the agreement, the wholesale businessman looks for clients for the supplier, and the latter, in turn, pays interest on each of the transactions made.
When concluding a contract, pay attention to several aspects:
- The main function of an agent is to find buyers.
- The contract is signed by the agent and the supplier.
- The signature can be put by an individual who does not have an LLC or individual entrepreneur.
- The document must indicate the percentage you receive for the transaction.
- The agreement may contain sales volumes, payment methods (non-cash, cash), work schedule and other details.
- The contract specifies the information available in the Civil Code. It states that the contract obliges the agent, for a fee, to legally act on behalf of the principal on his own behalf, but at the expense of the other party, either at his own expense or on behalf of the principal.
There are a number of options to consider here:
- You, that is, the agent, act on behalf of the supplier and at his expense.
- You act on behalf of the supplier, but at your own expense.
- You act on your own behalf and at your own expense.
Of course, the presence of an agency agreement does not provide a 100% guarantee in case of cooperation with a dishonest supplier. This document is intended to provide you with emotional peace of mind and confidence that you are acting in accordance with the law. The presence of an agency agreement is a reason for the supplier to be confident in your integrity and legal literacy. It is much more important, of course, to agree with the other party on a humane basis, establish good relations and let the supplier understand that by working with you, he will always be afloat.
- Before you implement your wholesale business plan, choose a niche to fill and analyze the market.
- Study the properties of the products you would like to work with, learn more about the sales market and do not lose sight of the seasonality of the product.
- When starting work, always focus on accumulation (money, clients, product balances).
- As your business develops, your staff will expand, so carefully consider every step and think about the feasibility of hiring new specialists.
- The beginning is always the most difficult, and therefore there will be a lot of work; for an indefinite period you can forget about holidays, weekends and vacations.
- If you can avoid taking out a loan and incurring other financial obligations, refuse them, at least until you are sure that you are not at risk.
Typical mistakes of beginners in the wholesale business
1) There is no clear action plan. There is no improvisation in business, and, unfortunately, many new businessmen forget about this. The difference between business and everyday life is that things left to chance turn out to be insoluble and do not bring good results. Many entrepreneurs do not have an action plan or project. A business plan (wholesale sales) should accompany you from the very beginning of your activity. Subsequently, there simply won’t be time to compile it.
If you want to make a profit from your work, write down each action and compile it for a year. Think about what is needed to expand your client base, how to turn casual clients into regular ones, write down the actions on paper. Work on a personnel search system, recruit employees, find suppliers. Developing a clear plan will take you a minimum amount of time, but will save you maximum time in the future.
2) Starting capital is distributed incorrectly. Most beginners who ask the question: “How to open a wholesale business?” want everything at once, and therefore waste their start-up funds irrationally. Irrational expenses include the purchase of ultra-modern equipment, high rent for a warehouse and high salaries for specialists. Remember that business brings money, first of all, to sales. Therefore, it is better to use funds to develop sales, supply and distribution channels.
When drawing up a business plan, pay attention to the most costly items. Analyze them and understand that you won’t need them at the very beginning of your work. From the list you can cross off new expensive office equipment and the creation of a modern personal website - you will deal with these issues later. If you can work not in the office, but in any other premises, refuse to rent. You will always have time to move into your new office.
3. Lack of understanding of the importance of the target audience. Beginning businessmen often lack an idea of the target audience and market segmentation. And, at the same time, these are key values in business. If you don't identify your target audience and understand who your products are for before you start selling them, it will be very difficult to create an effective sales plan.
An advertising campaign is effective when it is clear for whom it is designed. Think about who your product is for? How old are these people? On average, how much do they earn per month? While you are confident that your concept is interesting to any category of the population, you should not send advertising to everyone - you will waste time. The success of your business depends on how accurately you present your potential client.
4. Lack of understanding of the difference between sales and marketing. A number of entrepreneurs do not understand how sales differs from marketing, and are confident that these concepts are practically synonymous. But that's not true. Let's give an example. The seller generates and implements wholesale business ideas and takes a number of actions to ensure that a person purchases products. This is sales. Actions on the part of a marketer aimed at getting the buyer to contact you - marketing.
If you know exactly about your target audience, there will be no problem with advertising. You will clearly understand how and where it is best to give it. There are a million ways to attract a client. One business is effectively promoted using one advertising campaign, while the promotion of another is based on a completely different concept.
5. Expectation of instant profit. Many entrepreneurs do not understand: there is no instant income in business. This is especially true for those who have not previously conducted such cases. And, if it is not possible to make a profit during the first months, people quit the business. You just have to be patient.
When calculating any business plan, one takes into account the fact that the first year of operation does not provide almost any profit. Moreover, it can be very expensive. And only then the losses become minimal, then they are reduced to zero, and after a couple of years the ready-made wholesale business begins to generate income. Patience is the basis of any business project.
How to increase sales in a wholesale business
There are ways you can use to attract clients and increase sales. For example:
- Streamlining the sales management system.
- Interacting with regular customers and attracting them to work.
- Creation and implementation of a high-quality advertising campaign.
- Increasing customer base.
- Converting potential clients into real ones.
- Increasing marginal profit.
- A competent system of motivation for sales specialists.
- Effective work with accounts receivable.
All these manipulations can be carried out within a small enterprise using special business technologies.
How to turn wholesale business customers from potential to regular
How the wholesale business is organized and what its specifics are is completely unimportant. The main thing is systematic and continuous sales. In this regard, the key point in the system is the development of a sales funnel. Moreover, it is not so much the presentation of this funnel that is important, but rather the effective work with it. Basically, wholesalers go through 6 stages of sales, at each of which it is important to negotiate with clients.
The first block is the number of clients who were called by managers.
The second block is the number of interested clients who received a commercial offer.
The third block is the number of clients to meet.
The fourth block is the number of people with whom meetings have already taken place.
The fifth block is the number of buyers who have entered into an agreement.
The sixth block is the number of customers who received the goods from the first shipment.
Who should you trust to do this work? The commercial department of the company. If we talk about a three-level sales department, then the department located at the first level creates a flow and makes “cold calls”. He is not involved in negotiations or documentation.
More qualified managers close sales. At the same time, highly qualified professionals, as a rule, do not want to deal with “cold calls”, and are more willing to talk with regular clients, draw up documents and accept orders. This leads to a cessation of the influx of new people into the wholesale business. Therefore, the best option is to create a three-level sales department in which responsibilities will be clearly distributed among employees.
After visualizing the funnel, you need to describe the indicators that exist at each level. If systematic measurement of indicators is not carried out, start measuring it right now, and then at any time you will be able to assess the reasons why income is not increasing and sales are not increasing.
How to identify weak points in your sales funnel
Galina Kostina,
Head of the consulting agency "ProfBusinessConsulting"
By taking a slice of the funnel, you will understand how many potential customers are moving to the next level. For example, at a certain stage there is a narrowing of the funnel. This means that it makes sense to talk about a weak point in the overall system, and you can quickly intervene and correct the situation.
Example 1. The daily responsibilities of managers include 50 “cold calls”, which is reflected in the checklist. However, there is no influx of new buyers. The reason may be the ineffectiveness of the “cold call”, the manager’s inability to negotiate at the proper level, or an initially incorrect drawing up of the buyer’s portrait.
Example 2. Thanks to cold calling, many clients became interested in your company. You sent them a commercial proposal (thanks to this, you moved to the second block). And here the funnel suddenly narrowed because the client did not want to meet. The reason is the incorrect preparation of the commercial offer, which the potential consumer simply was not interested in. The fact is that the buyers in this case are experienced buyers who pay attention only to the numbers, and not to the goods, which may be of the highest quality. Therefore, think about how to create the most attractive commercial offer.
Example 3. Your employees have regular meetings, you send specialists on business trips, but all to no avail - no contracts are concluded. Review the negotiation model, organize seminars or courses for employees where they could acquire the necessary skills. After training, evaluate the situation.
Example 4. Contracts are concluded, but at this stage the buyer stops working with you: he does not place orders, and shipments are not made. You will need the help of qualified managers who know how to work with objections and have excellent communication skills.
Information about experts and company
Galina Kostina, head of the consulting agency "ProfBusinessConsulting". Business Consultant, expert in increasing sales and profits for small and medium-sized businesses. He has 18 years of experience as a top manager in large manufacturing companies. She went from chief accountant (including at Wimm-Bill-Dann) and director of economics and development to creating her own Consulting Agency. Has successful experience in implementing internal development projects, strategic planning, production expansion, and attracting investment financing. Author of articles for professional federal publications, leader of trainings and master classes.
Consulting agency "ProfBusinessConsulting" is a team of professionals dedicated to technologies for growth and achieving results for small and medium-sized businesses.
Wholesale trade is a necessary link in the trade of any goods. Essentially, wholesale trade is an intermediary between a manufacturer and a retailer.
The job of retailers is to sell products directly to customers. Wholesale trade deals with the resale of goods from the manufacturer, distributing the product in smaller quantities to retailers.
Wholesale trading can be very profitable, or it can be barely profitable.
A lot depends on the scale of wholesale trade, the entrepreneurial spirit of the organizer, and the level of markup.
Types of wholesale trade
Wholesale business idea can be implemented in various options. The wholesaler may be dealer, official representative of the manufacturer, facilitating his work in selling products.
1. Official representative
This is the most profitable option for wholesale trade, since it allows you to set your own valuation for the product, do not depend on other suppliers in the trade chain, and respond in a timely manner to changes occurring in production.
Large manufacturers, as a rule, create wholesale dealer companies themselves in order to separate production and sales of products and increase sales efficiency.
The dealer option for implementing a wholesale trade business idea can rarely be used in practice by a novice entrepreneur, since this niche is usually occupied.
2. “Sales department” for the manufacturer
Therefore, entrepreneurs often use the option of cooperation with several small manufacturers who do not have their own companies for selling products. In this case, the wholesaler takes over the functions of the manufacturer's sales department and handles logistics, earning some money on a markup.
Features of the “sales department”: pros and cons
The disadvantage of this wholesale trade option is the need to own or rent a warehouse for finished products, since manufacturers, as a rule, strive to transfer the manufactured products for sale as quickly as possible.
The risks are that there may be a time lag between receiving finished products from the manufacturer and concluding contracts with retailers. In this case, the warehouse becomes overstocked and sales become difficult.
However, the advantages of such wholesale trade are the possibility of establishing a favorable markup on goods and obtaining deferred payment terms from the manufacturer.
3. Intermediary - wholesale distributor
Another option for wholesale trade is the purchase of large quantities of goods from a larger wholesale supplier and subsequent resale and delivery to retailers, that is, obtaining the status of a wholesale distributor.
This option is more realistic for use by novice entrepreneurs.
However, to obtain an acceptable level of profit, it is necessary to have transport for delivery of goods and, preferably, to have a wholesale warehouse for the formation of consignments of goods. With this type of wholesale trade, the money goes to the account of the wholesaler, the consignment of goods arrives at the warehouse, and the retailer does not see from whom the goods are actually purchased.
Main distributor risks
This is important because there is a danger of entering into a direct contract between the retailer and the main supplier. This type of wholesale trade provides fairly good experience in organizing transportation and concluding contracts.
Wholesale trade: logistics
Logistics schemes can be very different:
1. Goods from suppliers can be delivered to the warehouse of the wholesaler, received, and then batches are formed from the received goods for delivery by the retailer.
2. You can also work according to a simplified scheme, when a batch of goods is formed by a wholesaler, and the goods themselves are delivered by transport companies from the supplier’s warehouses.
True, in this case, the name of the real supplier of the products may appear in the waybills, and there are risks of concluding direct contracts.
3. An even simpler option for wholesale trade, from a financing point of view, is simple intermediation between wholesalers and retail stores.
In this case, the intermediary takes on the work of coordinating the assortment, forming a batch of goods, and delivering the goods to the retailer. In this case, as a rule, the intermediary does not set a wholesale markup on the product, but receives a certain commission for his services.
This option for wholesale trade does not require working capital, but carries a lot of risks, since the intermediary can always be excluded from the chain of wholesale trade business processes.
Wholesale trade: where to put your efforts?
To choose the right option for implementing a wholesale trade business idea, you need to thoroughly study the product market, conduct research, narrow your specialization as much as possible, without trying to cover the wide range of goods offered.
Specialization and marketing research allow you to have a good understanding of the range of goods, wholesale and retail prices, and, depending on demand, set the optimal price to obtain maximum profitability.
Organizing wholesale trade can be a very profitable and promising business. But this is only possible if you have gained certain experience, have knowledge in the field of logistics, and carefully consider legal issues when concluding contracts.
Business idea: wholesale trade
The first 50 steps to creating your own wholesale company
How to stop dreaming and make money 260,000 thousand rubles on wholesale sales from one transaction?
Quite a bold statement, isn't it? :)
One of my students, Sergei Danilov, not long ago earned 260,000 thousand rubles in net profit by bringing together a supplier and a buyer for the sale of edged boards to a large Moscow holding.
It only took a month from zero to first money. Below I will tell you about how exactly this mediation scheme works, and how each of you can implement it (if, of course, you want to).
In order not to go into all the specifics, I will try to explain everything in a simple situation. For example, there is some kind of timber producer who cuts and sells timber. He has a lot of forest, but no normal clients (because his only source of advertising is word of mouth).
And at the other end of the region (or even in a neighboring region) there is a buyer with money who desperately needs this forest.
However, neither of them can find each other, due to lack of advertising and Internet skills.
You can help these people find each other by earning your percentage of the volume of this timber sold. For example, one truck of timber costs about 300,000 rubles. By making just one call, connecting a client with a supplier, you can already earn 30,000 rubles by making just one call, and bringing these people together.
Why can intermediaries now earn from 100,000 rubles out of the blue?
It's no secret that at the moment in Russia and a number of CIS countries the wholesale market is still in the wildest state.
Manufacturers and large wholesalers continue to attract customers only through word of mouth and old connections.
However, both suppliers and buyers always need each other (because construction is ongoing, production is running, and so on). With the development of the Internet, almost every person who has a desire has the opportunity to become a kind of guide in the world of wholesale. When you, following simple technologies, find clients for your supplier, thereby earning really serious money through intermediation.
But how can this be? Why can't the buyer find a supplier himself?
There are 2 reasons here. The first reason is that the supplier does not know how (and does not want) to advertise properly. As a rule, these are men over 50 years old who have been involved in this type of business since the 90s. They completely deny the Internet, the website, Yandex Direct, and so on.
Of course, buyers can find them themselves. But, since our country is still huge, and wholesale products are consumed in truly huge volumes, one way or another, not all suppliers are lucky enough to sell their products in full.
We are in the business of helping suppliers sell their products on a wholesale scale.
What is sold wholesale or what niche to choose?
Wholesale sells everything that is consumed in large volumes. Do an experiment. Make an announcement on Avito (avito.ru) that you, for example, sell sugar in bulk at the average market price. Most likely, in a day you will receive from 10 to 15 calls from specific people WITH MONEY, ready to buy your sugar. All that remains is to find a supplier, increase your margin and make money on it.
This is the so-called thirsty crowd principle. You can sell anything that is consumed in large quantities. These are timber, meat, sugar, cereals, fruits, vegetables, crushed stone, sand, chemical products, caviar, special equipment, various equipment, and so on.
Bad niches in wholesale are: some unique cosmetics in bulk, unique rhinestones in bulk, colored pencils in bulk, and so on.
For successful sales, you need a niche in which there is always a huge demand (because people are constantly building something, pouring something into cars, and eating something).
What if I bring the supplier and the client together, will they handle everything themselves and cheat me?
We also once wondered about this very question. But, nevertheless, the solution to this issue is an agency agreement. This is when you enter into an agreement with a supplier that you will find clients for him and receive interest on the volume of products sold. In this case, the contract guarantees you that you will not be scammed.
There is no point in the supplier cheating you, because he is interested in the constant sale of his products. And, of course, the more money you make, the more money he will make.
How to attract clients who have $$$?
We attract all clients through message boards on the Internet and through Yandex Direct contextual advertising. There is a simple algorithm that will allow even a beginner to write truly selling advertisements that will generate stable calls and orders.
Oddly enough, now many large companies and holdings are looking for suppliers on the Internet. Unfortunately (or fortunately), suppliers do not understand this, so intermediaries easily make money on this.
Who am i?
Hello, my name is Alexander Zalogin.
In a year and a half, I managed to create 2 of my own wholesale businesses from scratch without any start-up capital to companies whose average ONE-TIME transaction checks reached $20,000.
For the Russian wholesale intermediary business, these are very significant amounts (at least for today).
Now we sell fruit and vegetable products to large Moscow factories.Our company website: www.stu93.ru
Why am I telling this?
Not at all because I want to show off my earnings. I want to show that since I succeeded(and, to s I mean, many of my students already have, although in slightly lower numbers than mine), then you are capable of this too.
Why, if everything is so simple, doesn’t everyone do it?
If you think so, then you are in vain :) Here, for example, are reviews of people who are already doing this and getting some results. Screenshots from VKontakte:
You too can start selling wholesale and make moneyon this from 100,000 rubles!
It is enough just to take a ready-made proven model,and consistently apply it to your niche
However, at the same time, I understand that the most difficult are the first steps. Start from scratch to the first more or less noticeable income, at least stable $1000-1500 per month. Then, having a stable income, it’s much easier.
People often come to me with this very question: Alexander, help me get started.
But our wholesale trainings with Vladimir Olaev are often too expensive for beginners.
Therefore, I decided to provide detailed step-by-step instructions for starting wholesale sales - how I would start wholesale from scratch if I started now.
In this training, I will tell you in detail the first 50 steps that will allow you to:
1) Find out which niches in wholesale work and which don’t!
2) Analyze the possibilities of your region of residence for wholesale sales
3) It’s good to analyze niches for seasonality
4) Cut off all non-profitable niches
5) Finally select 5 key niches for the test
6) Directly test the selected niches
8) Receive first calls and orders
9) See the dynamics of selected niches
10) Finally decide on the niche in which we will sell wholesale
11) Create ads that actually sell
12) Use Yandex business cards as a sales weapon
13) Launch the right wholesale Yandex Direct cheaply!
14) Write selling ads in Yandex Direct
14) Create a selling wholesale website for 280 rubles!
15) Close all customer objections on the website
16) Show the value of your offer on the site (thus getting out of competition on price)
16) Go to work with clients
17) Learn how to properly close clients on deals
18) Gain the skill of working with customer objections (expensive, I’ll think about it, etc.)
19) Write your first sales script for working with clients
20) Receive first orders from clients
21) Go to supplier search
22) Get a detailed algorithm for finding a supplier through Networking or personal connections!
23) Find your suppliers on the Internet
24) Set up Yandex business cards to search for potential suppliers
25) Find out a way to 100% check a supplier for fraud
26) Get a working script for conversation with the supplier
27) Guaranteed to interest the supplier in mutually beneficial cooperation
28) Create a marketing kit or sales presentation to create maximum trust
29) Find out why an agency agreement is good, but an LLC or individual entrepreneur in wholesale is bad!
30) Find out the main legal aspects of the agency agreement, or how not to be deceived!
31) Get a WORKING agency agreement template
32) Conclude an agency agreement with the supplier in person
33) Conclude an agency agreement with the supplier remotely
34) Start connecting the client with the supplier
35) Schedule a personal meeting with the client (if possible)
36) Conduct a transaction remotely
37) Overcome the fear of personal meetings and negotiations
38) Find out exactly how to behave at the first personal meeting with a client and supplier
39) Find out exactly how to position yourself in front of a client
40) Correctly sign the supply agreement at a personal meeting (if possible)
41) Correctly sign the supply agreement remotely (if a personal meeting is not possible)
42) Monitor the client’s payment process
43) Monitor the process of shipment by the supplier of goods to the client
44) Find out the main aspects of delivery in the Russian Federation and the CIS
45) Learn how to work with road and railway transportation
46) Find out how to be sure to avoid scams in wholesale
47) Receive the first agency interest from the supplier
48) Continue working with a client with whom a transaction has ALREADY been completed
49) Create a constant flow of agent interest
50) Start searching for new potential clients
The seminar is mainly “for our own people” - too many people ask.
The duration of the seminar is 7 hours.
Reviews about the training
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Feedback about the training: I NOW EXACTLY KNOW HOW TO DO IT!
Ivan Potishny http://vk.com/potishnyy |
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Feedback on the training: Learned - did - got results.
The whole family took part in the webinar. Initially, this was my idea, but my husband was very skeptical. Moreover, paying money on the Internet for learning what he already knows was, to put it mildly, generally strange for him. He had experience with similar sales before. I thought that everything in this area i.e. My husband is not at all familiar with the information business. This format of training is completely incomprehensible to him. And I, in turn, had deep knowledge of Ya.Direct. I work in Direct every day. Imagine my surprise when my husband heard some tricks and subtleties for himself, and I learned new tricks of Direct. That was MEGA COOL! I’ll tell you right away about my husband’s reaction. Remember, yes, that he was skeptical. Here are the freeloaders! We’re all sitting there doing nothing, and they’re already asking for a break! In general, these were unexpected emotions for me. The best part was in the morning. My man slept with the knowledge he acquired - and in the morning he already developed an action plan. And I received compliments for insisting on participating in the webinar. Vladimir, Alexander! Thanks for the webinar. Indeed, there is no water, but only practical information. Found out - did - got results. Natalia Markelovahttp://vk.com/id3930528 |
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Feedback on the training: I think that this training is for those who want to achieve something and don’t want to just waste time. Guys, you conducted the training well in all the stated parameters, which open up new opportunities for us and will allow us to move on. I would like to note the successful presentation of information, understandable for people with no experience in this field of activity, and in addition, I was especially pleased with the large number of live examples from your own practice!!! I was left with a very good impression. I believe that this training is for those who want to achieve something and don’t want to just waste time. Thank you:))) Ekaterina Shutova http://vk.com/id17442023 |
Who is this training for?
This training is primarily for those who have already decided that waiting 100,500 years until they can finally afford to buy a decent car and provide themselves with a decent life is too long. And therefore I am ready to act.
Who needs it - you know that you need it. If in doubt, definitely not here. For those who don’t have time and miss out, you’re simply unlucky, and we refuse to work with losers!
Along with this training you will receive the following bonuses:
1. Book "Secrets of a quick start in WHOLESALE"
Cost 1497 rubles, for you - free.
- Where should you really start in wholesale?
- Why a niche is the basis for a successful start
- What niches in wholesale actually work?
- How to motivate yourself to continue developing a new niche?
- 5 basic criteria for a profitable wholesale niche
- How to be guaranteed to start in wholesale without any skills or experience
- Where can I get motivation for a quick start?
- Why do 90% of beginners never achieve results?
- How to correctly model other successful niches in the wholesale business
- What is “Startup Syndrome” and how to deal with it?
3. Templates for working agency agreements for wholesale sales
4. Step-by-step checklist of all 50 steps, with examples and templates:
I guarantee you a full refund within 30 days if, after implementing all the technologies from this course, you do not get the expected effect and are disappointed in the purchase. I am so confident in the quality of this information that I give you this guarantee.
Hello! In this article we will talk about increasing sales in the wholesale business.
Today you will learn:
- What is wholesale trade;
- How to increase the volume of wholesale sales;
Features of wholesale trade
The production volumes of your enterprise are quite large and you do not have time to sell the products? Then it's time for you to think about wholesale sales.
Wholesale - a type of trade in which one enterprise provides goods to another enterprise in large quantities.
If you decide to hire new employees, then it is best to take a closer look at the sellers of retail stores of similar specifics. They are already familiar with the product, know the features of sales, and know how to work with needs.
Another, no less successful source of personnel is competing companies. By luring several employees to your staff, you will kill two birds with one stone - you will unsettle your competitor and get professional sales people.
However, be careful. A competitor's employee may turn out to be a spy or simply return to his old place over time, taking your customer base with him.
You can also look for employees in companies from related industries. Such candidates will be easier to train than those who have worked with a completely different product.
Instead of looking for new employees, you can train existing ones. In addition, there are various ways to increase sales. For example, organize a competition among account managers and award the best salesperson of the month.
How to attract new clients
- Using cold calls. We have already talked about them earlier, so we won’t dwell on them. Let’s just say that when choosing this method, special attention should be paid to the database itself with contacts of potential clients and information about them, as well. A script is a conversation script that your manager will adhere to.
- A great source of clients is your customers.. If you have established a trusting relationship with your customers, then ask them to recommend your company to their partners. This is a pretty effective method.
- Look for clients at various events: get acquainted, exchange contacts.
- Use to attract clients. Personal sales via the Internet or telephone will be especially relevant.
Wholesale sales optimization mistakes
Mistake 1. A good salesperson will ensure high sales volume.
There are not so many really good traders, so there won’t be enough for everyone. In addition, it is very difficult to determine the degree of professionalism of each individual employee. Therefore, if you rely only on your staff, you are unlikely to get good results.
Mistake 2. Expanding the product range will cause sales growth.
This is a mistaken opinion of most entrepreneurs. The introduction of new product categories can reduce profits, especially if the new product is in no way related to the main one.
Example. The Biс company several years ago introduced solid perfumes into its range, the bottles of which resembled a lighter in shape. However, the project turned out to be unprofitable and soon the lighter perfumes were discontinued.
No, it will not. It is necessary to advertise a product, but in moderation. Excessive advertising will not only hurt your pocket, but will also irritate potential consumers. It is better to advertise not a lot, but of high quality, that is, personalize your messages, choose the right communication channels.
Mistake 4. We lower the price and sales will increase.
This doesn't always happen. Wholesale business is characterized by large volumes of purchases, which increases the risk of purchase for the consumer. If your price is lower than the market average, the client may suspect the low quality of the product or your dishonesty.
Remember that a price that is too high or too low must always be justified.
For example, if you set a high price, you can show the customer that your product is of very high quality. In the case of a low price, tell the client that you have your own system on which you save, or you own several levels of production at once, or the raw materials from which the product is made are supplied to you at a large discount due to long-term cooperation with the supplier.
The main idea of a wholesale business is purchasing goods in large quantities at one price and selling them in small wholesale with a markup. Alternatively, you can open your own retail store, selling the goods at an even higher price. You can open a wholesale business from scratch, even without having huge capital to purchase the first batch of goods. It can be taken for sale. The scheme for building any business can easily be copied from any existing enterprise.
Main business advantages
The first advantage that entrepreneurs take into account when trying to open a wholesale business from scratch is big money. This advantage is perfectly complemented by a simple and understandable starting scheme, even for beginners. They usually start with small volumes, gradually increasing the scale of the business.
A wholesale business requires specializing in one specific product or niche. This allows you to delve completely into one area, studying it thoroughly and increasing your expertise in it. And the better, the more detailed you understand your business, the easier it is for you to conduct your business more efficiently.
The simplicity of the scheme of any wholesale business allows you to copy any convenient and effective scheme of competitors. You can start a business with minimal investment. Moreover, it does not require significant time investment. Therefore, you can easily start a business while working at your main job.
Deciding on the type of business
Before you start a wholesale business from scratch, you need to decide what type of wholesale enterprise you will have. There are several opportunities to make money from wholesale sales.
- Become a large wholesaler. Your task is to purchase large quantities of goods from production and sell them in smaller quantities. Often such entrepreneurs work with several manufacturers, offering a wide range of products.
- Become a mid-level wholesaler. These people prefer to open a store selling goods from one specific industry, but specialize in it very well. They may offer one type of product and various accessories for it from different manufacturers.
- Highly specialized wholesaler. Usually offers one type of product, for example, only shoes, or only bags. Often works with different manufacturers.
- Mediator. It is not necessary to open a store for this activity. It is enough to find a buyer with a specific request, and find a seller for him. Then monitor the progress of the purchase and sale, receiving a percentage of the transaction. The process can also go in the opposite direction: first, a seller is found with the product for which a buyer is being sought.
These are just the most common forms of business organization with which you can start your own wholesale business. If you search, you can find other interesting business schemes on the market.
We are looking for our industry
Before you start your own business, it is advisable to understand what industry you plan to work in and what basic laws work in it. Therefore, it is easiest to open a business in an industry in which you already have some experience. Although, if you wish, you can master other areas of interest.
To decide in which industry to open your wholesale store or base, think about what industry you most often encounter in life, what do you understand the most? This can be either your main job or a hobby. Of course, it is advisable that you like this industry and are sincerely interested in it.
In addition, it is important to understand the following nuances that influence the choice of industry for wholesale activities:
- What production does your region specialize in? After all, these are the goods that can be purchased here at the lowest possible price. At the same time, you will not have problems with delivery and all issues can be resolved as quickly as possible - the manufacturers are, as they say, close by.
- Having chosen a product, try to determine the market capacity: what is the demand for it, what is the turnover of the product, average prices for it and other details.
- Assess the seasonality of the product. Of course, it is easiest to work with goods that are not subject to seasonal fluctuations. But in other cases, you can find ways to smooth out these differences. It is always better to focus on those goods that are in demand in any economic conditions.
- How easy is it to store the product? This question is especially relevant when you are thinking about how to open a wholesale warehouse. If the object of your business activity is perishable products, you need to pay special attention to the warehouse space to ensure the necessary conditions. And these are additional expenses.
- How easy is it to transport the goods? This applies not only to the size of the product, but also to its fragility. For example, it is very difficult to deliver glass and porcelain products, as there can be a high percentage of broken goods. This must also be taken into account when calculating the profitability of your business.
How to choose the right product
Before opening a store, you should not only decide on the product, but also test the demand for it. To do this, it is recommended to conduct such a campaign. Choose about three to five products that you are interested in working with and that can really be in demand in your region. Then post advertisements for their sale on free boards on the Internet.
It is important to adhere to the following rules:
- post advertisements on the same boards;
- post them in a unified form, one for everyone, so that you can compare the results later.
After posting your ads, carefully collect and analyze feedback. Consider the number of calls and what the callers are interested in: volumes, prices, willingness to place an order, etc. In this way, you can estimate the demand for the product that your store plans to sell. You can answer potential customers that the product is not yet in stock, or call back a little later and report that it is out of stock.
Determining viability
Only after you have decided on a niche, a product, an approximate market need, its capacity, and you know the needs of buyers and sellers, can you assess how viable your endeavor really is and whether it is worth opening a store of this kind.
Calculate how long it will take you to deliver the goods and how much it will cost you. Monitor the road transport market that operates in your region and choose the right carrier for yourself. Then calculate how much you can receive in the saddest and most optimistic scenarios. Based on the data received, he can decide whether you should open a wholesale store, base, warehouse or not.
Let's get down to business
Having resolved all the preliminary issues, decide on what scheme you will follow to conduct your business. There are two main directions of running such a business:
- You look for a buyer, find a seller, organize and control the purchase and sale process, receiving a percentage of the transaction. For this type of activity, you must first conclude an agency agreement with the manufacturer.
- You buy goods at your own expense at a wholesale price and sell them at a premium, making a profit from the difference.
As a rule, the latter model is used by large market players who have large finances to carry out transactions. In addition, this form of doing business presupposes the presence of a warehouse, personnel to service it, and the costs of their maintenance.
A novice entrepreneur can limit himself to the first option, which eliminates these expenses, as well as the costs of purchasing goods. In addition, he does not have to register an LLC or individual entrepreneur; he can work as an individual by drawing up an agreement. And if you start such work via the Internet, organizing a wholesale business will be even easier.
Two words about competition
When planning to open your own wholesale store, take into account the competition in the region and in the industry as a whole. A small player in the market can go bankrupt if large distribution networks that have established great teamwork are already operating in this area. Therefore, if you want to compete with such giants, study their features, think about what you can win in front of your clients.
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