How To Become a Wholesale Distributor

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One of the first decisions you must make is to decide whether or not you will be selling your own products or if you will be getting them from another distributor.

Then check with your local government and zoning offices to find out if you need to register your business and whether or not you will need to collect state or local sales taxes.

To become a wholesale distributor of other products, you must first determine where you will get your products from.

It would be better to actually order from a distributor who sells wholesale products, and the prices are very, very low.

There are several companies on the internet that offer drop shipping. You sell the product, place your order with them, giving your customers name and address and they ship the product. It will be more difficult to become a wholesale distributor using most of these companies because you have to be able to mark up the price, and this could raise the price above what the consumer would be willing to pay.

For example, if you want to sell balloons at events etc. and you can get them for twelve dollars a gross (144 pieces or 12 dozen), then you could sell them at wholesale prices and still make a profit because you have paid only one dollar per dozen. They could easily sell at retail for one dollar each. If you sell them for fifty cents each as a wholesale distributor, you would still make a profit. Many times a wholesale distributor sells to other distributors who will also mark up the price of the product, so that it in this example the balloons will eventually be sold for one dollar each.

This is the procedure or process used by all manufacturers. The product is manufactured, sold to a wholesale distributor and the product is then resold to a retailer who again marks up the price.

If you manufacture your own products the procedure is the same.  You would then decide what price to charge for retail sales and what price to sell it for as a wholesale distributor. You must take into consideration the fact that shops and dealers will increase the price.

If your total cost for creating a product is seven dollars, then you would sell it at retail for approximately fourteen dollars. If you sell it as a wholesale distributor then your sales  price would be around ten or eleven dollars.

One of the most important things to make sure of is that the manufacturer has an ample supply of the products you plan to sell and that you can get them at wholesale prices. You do not want to process orders and not be sure the product is available.


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