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 The Reality Of Buying Wholesale Submitted By: Kirk A Larson In my line of business, I often receive emails and phone calls from people who are just starting their online retail businesses and searching for wholesalers who can give them competitive prices on the latest merchandise from the most popular brand names. While it’s understandable that one would want to sell the latest merchandise from the highest quality, most popular brand names, it’s often an unrealistic goal unless you have a substantial amount of capital to invest in your business. This is not to say that every prospective entrepreneur with the dream of establishing an online retail business should just throw in the towel – quite the contrary. Prospective online retailers need to understand the reality of the consumer goods industry, the abilities that they have based on their capital investment, and then design their business plan accordingly. In my next article, I’ll discuss some excellent options for prospective entrepreneurs with limited capital. Popular Brands Work Hard to Protect Their Reputation But first, let’s look at how some of the most successful companies in the consumer goods market operate their distribution channels. Companies with highly popular brand names have worked hard to establish these brands. Understandably, in order to protect the reputation of their brand names, they often establish strict controls in their distribution channel to ensure that their name is not compromised by association with a sub-standard retailer.Authorized Retailers Only Many of them directly control their distribution channel and only sell their products to authorized retailers who have met their application requirements. Their requirements for authorized retailers often include: A substantial minimum sales volume A physical presence, not just an online storefront An established history of retail sales and an exemplary credit rating Strong recommendations from other vendors with whom a business has dealt No Distribution to Any Private Retailers Some brands don’t allow private retailers to resell their products at all. Companies who operate in this manner may own their own retail shops Click here for the rest. |
 
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