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How to Start a Wholesale Distribution Business Part 2

Getting Into the Game Today, total U.S. wholesale distributor sales are approximately $3.2 trillion. Since 1987, wholesale distributors’ share of U.S. private industry gross domestic product (GDP) has remained steady at 7 percent, with segments ranging from grocery and food-service distributors (which make up 13 percent of the total, or $424.7 billion in revenues) to furniture and home furnishings wholesalers (comprising 2 percent of the total, or $48.7 billion in revenues). That’s a big chunk of change, and one that you can tap into.

The field of wholesale distribution is a true buying and selling game—one that requires good negotiation skills, a nose for sniffing out the next “hot” item in your particular category, and keen salesmanship. The idea is to buy the product at a low price, then make a profit by tacking on a dollar amount that still makes the deal attractive to your customer.

Experts agree that to succeed in the wholesale distribution business, an individual should possess a varied job background. Most experts feel a sales background is necessary, as are the “people skills” that go with being an outside salesperson who hits the streets and/or picks up the phone and goes on a cold-calling spree to search for new customers.

In addition to sales skills, the owner of a new wholesale distribution company will need the operational skills necessary for running such a company. For example, finance and business management skills and experience are necessary, as is the ability to handle the “back end” (those activities that go on behind the scenes, like warehouse setup and organization, shipping and receiving, customer service, etc.). Of course, these back-end functions can also be handled by employees with experience in these areas if your budget allows.

“Operating very efficiently and turning your inventory over quickly are the keys to making money,” says Adam Fein, president of Pembroke Consulting Inc., a Philadelphia strategic consulting firm. “It’s a service business that deals with business customers, as opposed to general consumers. The startup entrepreneur must be able to understand customer needs and learn how to serve them well.”

According to Fein, hundreds of new wholesale distribution businesses are started every year, typically by ex-salespeople from larger distributors who break out on their own with a few clients in tow. “Whether they can grow the firm and really become a long-term entity is the much more difficult guess,” says Fein. “Success in wholesale distribution involves moving from a customer service/sales orientation to the operational process of managing a very complex business.”

Setting Up Shop When it comes to setting up shop, your needs will vary according to what type of product you choose to specialize in. Someone could conceivably run a successful wholesale distribution business from their basement, but storage needs would eventually hamper the company’s success. “If you’re running a distribution company from home, then you’re much more of a broker than a distributor,” says Fein, noting that while a distributor takes title and legal ownership of the products, a broker simply facilitates the transfer of products. “However, through the use of the internet, there are some very interesting alternatives to becoming a distributor [who takes] physical possession of the product.”

According to Fein, wholesale distribution companies are frequently started in areas where land is not too expensive and where buying or renting warehouse space is affordable. “Generally, wholesale distributors are not located in downtown shopping areas, but off the beaten path,” says Fein. “If, for example, you’re serving building or electrical contractors, you’ll need to choose a location in close proximity to them in order to be accessible as they go about their jobs.”

To be continued..

Source : Entrepreneur.com

Submit Free Article | Read More Articles... By: Admin 2010-01-26
Liquidate Mate Ltd.

How to Start a Wholesale Distribution Business

Buy low, sell high: A background in sales and a keen eye for popular merchandise are the keys to success as a wholesale distributor.

So you want to start a wholesale distributorship. Whether you’re currently a white-collar professional, a manager worried about being downsized, or bored with your current job, this may be the right business for you. Much like the merchant traders of the 18th century, you’ll be trading goods for profit. And while the romantic notion of standing on a dock in the dead of night haggling over a tea shipment may be a bit far-fetched, the modern-day wholesale distributor evolved from those hardy traders who bought and sold goods hundreds of years ago.

The Distributor’s Role As you probably know, manufacturerspro­duce products and retailers sell them to end users. A can of motor oil, for example, is manufactured and packaged, then sold to automobile owners through retail outlets and/or repair shops. In between, however, there are a few key operators—also known as distributors—that serve to move the product from manufacturer to market. Some are retail distributors, the kind that sell directly to consumers (end users). Others are known as merchant wholesale distributors; they buy products from the manufacturer or other source, then move them from their warehouses to companies that either want to resell the products to end users or use them in their own operations.

According to U.S. Industry and Trade Outlook, published by The McGraw-Hill Companies and the U.S. Department of Commerce/Inter­national Trade Administration, wholesale trade includes establishments that sell products to retailers, merchants, contractors and/or industrial, institutional and commercial users. Wholesale distribution firms, which sell both durable goods (furniture, office equipment, industrial supplies and other goods that can be used repeatedly) and nondurable goods (printing and writing paper, groceries, chemicals and periodicals), don’t sell to ultimate household consumers.

Three types of operations can perform the functions of wholesale trade: wholesale distributors; manufacturers’ sales branches and offices; and agents, brokers and commission agents. As a wholesale distributor, you will probably run an independently owned and operated firm that buys and sells products of which you have taken ownership. Generally, such operations are run from one or more warehouses where inventory goods are received and later shipped to customers.

Put simply, as the owner of a wholesale distributorship, you will be buying goods to sell at a profit, much like a retailer would. The only difference is that you’ll be working in a business-to-business realm by selling to retail companies and other wholesale firms like your own, and not to the buying public. This is, however, somewhat of a traditional definition. For example, companies like Sam’s Club and BJ’s Warehouse have been using warehouse membership clubs, where consumers are able to buy at what appear to be wholesale prices, for some time now, thus blurring the lines. However, the traditional wholesale distributor is still the one who buys “from the source” and sells to a reseller.

To be continued..

Source : SmallBizBooks.com

Submit Free Article | Read More Articles... By: Admin 2010-01-21
TheBiggestClearance.com

Tips for Avoiding the Fraudulent Escrow Service Scam.

Some phony escrow sites list a license # of: 963–1867. Be suspicious if you see this, it was cut and pasted from the legitimate Escrow.com.

Go to Register.com and do a „whois“ lookup of the escrow company domain name. If the domain name was registered only weeks before, consider them to be fraudulent. The scammers usually reserve several names, rip off a few people, then dump the site.

Avoid any escrow company with eBay's name embedded in it, like Ebay-Escrow.com. They are all frauds. eBay uses the legitimate Escrow.com.

Don‚t foolishly think that you‘re safe just because your sale or purchase of a car took place through Autotrader.com, Cars.com, CycleTrader.com or eBay.com. Those sites are highly targeted by scammers.

Don't get suckered in by the professional look of an escrow company website. I can do that with Microsoft Front Page in 2 hours.

If the escrow company is located outside the U.S., don't use them. Are you nuts? There is no reason to use an offshore escrow company. They are not governed by any U.S. Laws.

If the escrow site has a „Verisign Secure Site, Click To Verify“ logo on their web site, it is most likely fraudulent. Click on the logo and if all it does is send you to Verisign's home page, they are fraudulent. Same with Internet Security Alliance, and TRUSTe logos. Always VERIFY if they are licensees of these organizations. Fraudulent websites like to paste them on their homepage, even though they are not licensees.

Avoid escrow companies that appear to be a well known company, but are not, i.e., WellsFargoEscrow­.com, WesternUnion-Escrow.com.

Assume that just about any escrow service with the word „Safe“ or Secure" in their name are neither safe, nor secure.

Avoid dealing with any escrow company that has a „.ORG“ as part of their name. Legitimate escrow companies are in business to make money, and should never try to pass themselves off as a non-profit organization, which is what the .ORG means. Any U.S. based escrow should end in .COM.

Avoid escrows that end with .BIZ, .CC, .INFO, ,US, you get the picture. That's all sleaze territory for web site extensions, inhabited mostly by cyber squatters.

If you‚re buying a used car, email the seller for a VIN#. If you don‘t here back from him, it's a fraud. Some scammers do actually respond back with VIN#s though, probably copied from another online ad, so be careful.

If the seller changes email addresses on you, stop dealing with him. He probably changed because either we, or another victim reported their previous email, and had their email account shut down. They will make up some virus excuse.

If the escrow company has the BBB logo on their site, but the link does not go to a BBB review of their business, then the site is a fraud.

Verify with the Better Business Bureau at BBB.com if they have a reliability report on your escrow company. It takes 5 seconds. Legitimate escrow services are members of the BBB, and should have a „Satisfactory Record“ on the BBB Reliability Report that pops up.

Avoid dealing with an escrow web site that does not have BOTH the address AND the phone number listed. Always call the phone number to make sure it‚s real. If you get some bogus message that says „leave a number“, it‘s fraudulent.

Remember that once you send money using Western union or E-Gold through an escrow company, you will never ever see that money again. Once the cash is wired to the other end and picked up by the seller, Western Union cannot get it back.

If you used PayPal to wire money to the seller, you cannot get it back. This is because PayPal is not an escrow service. They just instantly wire the money into the seller's checking account. Once they get the money, the scammers close the checking account, so PayPal could not get the money back even if they wanted to.

Before you wire money through Western Union, call the Western Union Fraud Department, 1–800–325–6000. Explain your purchase situation and ask them if they think it's a scam.

No law enforcement agency, no court, and no lawyer will help you if you get scammed.

Before you sign up, send the escrow company a simple email question and see if they respond. If they don't then consider them to be fraudulent.

Submit Free Article | Read More Articles... By: Admin 2010-01-06
Liquidate Mate Ltd.

Tips for Avoiding the Fraudulent Escrow Service Scam ( Part 2 )

A Real escrow company would never tell you to wire them money via Western Union, e-Gold, VUpay, etc. Western Union transfers CASH from one WU location to another, not to a real and traceable bank account! DUH! The only time you should be using Western Union is to bail your drunk loser of a brother out of jail. A real escrow company would tell you to use YOUR bank to wire money to THEIR bank, with their routing number and account number. There is a form you fill out and it must show who their beneficial bank is. You must still verify with your bank where the receiving bank account is REALLY located for their bank account before you wire, it could be a bogus account in Romania, Latvia, Estonia, the Carribbean.

Remember that the odds are 9 to 1 against you finding a legitimate online escrow service.

If you are stupid enough to wire escrow money through Western Union, don‚t use your mother‘s maiden name as the security question and answer. That will give them a foot in the door of your credit card companies. Instead make your security question something like this: Q: What is the first name of the intern who had sex with Bill Clinton? Answer: Monica.

Don‚t let scammers bait you into thinking you can use Western Union as an escrow, or that your money is protected by a password. Most of these scammers are in Romania and Nigeria, which are so corrupt, you don‘t even need a password to pick up the money. All you need to pick up that money is a pulse.

Try to close your deal in person if possible. For example, if you just saved $5,000 on the car, spend $300 on a plane ticket to go see it.

Don‚t buy a car from a foreign „seller“ online. Go get the car yourself, or don‘t close the deal. The heck with escrow. Foreign purchase transactions are for seasoned veterans, not you. There are too many complicated import laws and DOT safety and emissions hurdles for you to deal with.

**Avoid dealing with any escrow company that has a dash in the name, like secure-escrow.com. We saw maybe 1 out of 300 sites that were legit.

Avoid escrow companies that claim to be licensed in all 50 states, it‚s probably a lie. Even some top escrow services refuse to license themselves in Arizona which has licensing requirements that dictate the deposit of an unreasonably large amount of money as a condition for a license. California has tough licensing requirements too, so if you don‘t see them licensed there, you know they are lying.

To Be Continued..

Submit Free Article | Read More Articles... By: Admin 2010-01-04
Liquidate Mate Ltd.