Distributors are the operators who move the product from manufacturer to market. Unlike the retail distributors who sell directly to end users, the wholesale distributors transfer the products from their warehouses to companies that either employ the products in their own operations or further sell the products to consumers. Wholesale distribution firms do not sell directly to the end users. A wholesale distributor generally runs an independent firm in order to buy and sell products. Such operations are carried out from warehouses. At these warehouses, merchandise is received and transferred to customers. In short, wholesale distributor buys goods to sell these at a profit. The basic difference between a wholesale distributor and a retailer is that a wholesaler works in a business to business realm, instead of selling directly to the buying public.
Wholesale distribution is a field which requires excellent negotiation skills, the ability to locate hot items and good salesmanship. The goods are bought at lower prices and sold at prices that are higher but still attractive to the customers. A wholesale distributor must possess sales skills as well as finance and business management skills and the ability to serve the customers well.
Wholesale distribution companies are usually set up in areas where land is cheap and getting warehouse space is affordable. A person looking forward to start a wholesale distributorship business has three options, the first of which is to start form scratch. The second option is to buy an existing business, while the third option is to buy a business opportunity. Each of these three options has its own pros and cons.
The basic operations to be performed upon starting a wholesale distributorship business are defining a customer base and finding your suppliers. An important step in starting a wholesale distribution business is leasing a warehouse for storing the products. A wholesale distributor performs a number of functions in his day to day routine including sales, accounting, shipping, receiving and customer service. They also have to contact customers, process orders, support customers and do market research. Most of the wholesale distributors rely on software packages for handling of multiple tasks like inventory control, bar coding, accounting and client management. The potential customers of a wholesale distributor are retail businesses, retail distributors, exporters, other wholesale distributors and the federal government.