Over the past 100years the wholesale industry has served more than just an important role in the distribution process between buyers and sellers yet the everyday challenges make it harder for many wholesalers to maintain their position in the market. As many producers look to reach consumers we see how it is of great importance to establish a good supply channel for products. The wholesaler fulfils orders from retailers, satisfying retailer demands and getting customers what they want at a faster pace. In this modern business world we can now confirm some of the best tips for wholesalers that are here to stay while discussing the key factors that affect their businesses and the growing demands of the industry that need to be met in South Africa!
Since the main source of revenue for any wholesaler relies on the discount charged on products its easy to see where the advantage lies when dealing in this trade game for many wholesalers out there. Products are bought in higher quantity and at a cheaper rate by wholesalers which gives them an upper hand in dealing with retailers. This makes it easy to sell smaller units that in turn form an attractive margin with higher prices. Unlike distributors and sales representatives, wholesalers cut out the extra service fees and don’t demand an extra costs from their clients but overall they make enough money just by serving as a direct link between producers and buyers. Generally manufacturers only sell their products to wholesalers, extremely large retailers or its own retail chain but retail customers are directly turned away or required to buy in bulk which keeps the wholesalers at the top of their game.
What comes to mind when you think of huge companies like Walmart? I think of just in time inventory with any and everything available at the cheapest price. Research shows how time delivery can make the world of difference. Manufacturers are usually restricted to very few plants and geographic distance is likely to impose time constraints on delivery. Wholesalers have an upper hand in many different business sectors to serve as a warehouse to keep finished products nearby and provide it at a speedy time when the retail companies need more products to sell to clients. In this way retailers save on time too and are able to carry less inventory and lower operating capital which would be quickly used up on incorrect goods or unnecessary quantity amounts on items. As a retail business, choosing right wholesaler that’s based in the right place can save you tons of money and this tip is understood by many successful companies in South Africa.
Wholesalers buy goods from manufacturers and find retail buyers known as final customers but its not always up to how cheap items may be to make you successful as a wholesaler. A lot of factors come with the process that have to be dealt with like product limitations and the growing demand of the everyday buyer that has to be met. Most retailers choose from a variety of known products specifically chosen ahead of time and that makes it simple but when situations occur where a product is scarce it could cause wholesalers to stock up with goods that just cant compete. Buying low and selling high in contrast works well in many industries and continues to strike where revenue matters for most. Sometimes they store the products they buy from the time it is manufactured until the time customers need it. This gives wholesalers time to find the right retail clients, get the products to them and collect money from. Successful wholesalers keep all costs low when purchasing and this should remain number one until the correct retail market is found when prices can be increased to make reasonable profits. To find the balance between where to buy low and sell high comes from the implementation of market research tactics to find the perfect niche for your wholesale business. Once this established the process becomes easier to set aside general products and items that could be used as day to day leverage to get more exposure to the right retailers out there. Its always wise to choose profitable product lines and get exclusive deals.
Wholesalers that are involved in shipments of products can spend a lot of time figuring out the correct sites that can be used as location facilities. As land cost increase in metropolitan areas it becomes harder for wholesale business owners to manage their larger facilities. The decision as to where to locate can get expensive, in fact some areas of South Africa continue to surprise us with the rise in land costs and rentals. Facility location is also affected by access to inadequate transportation like roads, airports, seaports and railway lines. If wholesalers find the balance between costs and location areas with enough transportation and infrastructure needed to run a wholesale facility then there is no doubt that the success rate will increase of any wholesale business. Keep in mind rising fuel costs that could affect product distribution when transportation expenses claim a significant portion. The high costs are sometimes passed on to clients in the form of higher product prices and this could cause a negative effect. Ultimately the best locations for any wholesaler would be effective near busy metropolitan areas and city hubs where large amounts of people shop and compare prices for their best interest. Wholesalers should stay close to retailers that rely on their core products, this can make a difference in profits and company growth.
With so much competition in different markets, its wise to think about advertising methods that fit your wholesale niche market. Advertising is important for both new an existing businesses and help to communicate important information to potential clients. The success rate of getting known is much higher when appropriate advertising and marketing is done rather than sitting back and waiting for referrals. Without effective advertising campaigns, retail clients might miss out on specials and new products that wholesalers offer and the business may suffer losses due to poor sales.. Wholesalers should take advantage of the high demand for their products which can be bought at low prices in bulk. Advertising and marketing raises an awareness for different brands that are available and allows a company to know their competitors and plan strategically on how to cut down competition. In fact wholesalers can beat competitors by simply creating an awareness for buyers which could prevent cases of purchasing fake products and falling victims of scams. These tips can bring clients and work well for the reputation of any wholesale company in South Africa.