Starting up a wholesale business, just like any other business, is tough. You get together your products, you set up your store, create a website, run campaign ads, the works. Sometimes you fail, and sometimes you succeed as a business. There are mistakes made with every new venture, and new wholesale businesses are not excluded from this. These mistakes could cost your fledgeling wholesale venture, or you could learn from them and grow your business.
Wholesale businesses are business-to-business (B2B) ventures. They are businesses whose customers are other businesses, also called retailers. Oddly enough, most of the first-year mistakes have something to do with the customers. As a wholesaler, you must understand that your customer is your business. Without full-time customers, your business would go nowhere, fast.
These five common mistakes that wholesalers make in their first year of business are avoidable, thanks to the wealth of information from older, well-established wholesalers. Understanding what these mistakes are is a step towards avoiding them all together, or identifying what you are doing wrong and fixing it immediately.
Mistake #1: Not Doing Things that Don’t Scale
When you are starting a new wholesale business, you have to take certain risks. You have to do things that already established wholesalers won’t do, just to get a good grip on the wholesale business ladder. In other words, you need to do things that do not scale so that you can get initial traction.
Look up various marketing channels, test them all, and focus on the one that gets you more exposure, and the most customers. Reach out personally to people, and even get gigs talking at conferences. As a fully established wholesaler, these moves will not scale. But as a first-year wholesaler, these things that don’t scale will get you the initial traction you need.
Do not be too picky about scalability: Just Do It.
All you need is to get that traction so that you can move to the next step. Not doing things that don’t scale is not a very reasonable move for a new wholesale business. You will not get the exposure you need, and neither will you get those customers you need; you will not get traction. That initial traction is important to move forward, so prepare yourself to do what needs to be done.
Mistake #2: Not Setting Targets and Goals
This is a mistake that shouldn’t even exist, but, sadly, it does. From the moment you started your wholesale venture, you should have had a definite plan, set targets and goals that you wanted to achieve at specific times. Having a laissez-faire attitude towards your business, an approach that says ‘take every day as it comes’, is disastrous for a wholesale venture.
Set targets and goals help to keep you focused and motivated, pushing you to put in your best so as to achieve those aims. Without targets and goals, you are literally free-falling without a parachute or any hope of being caught before hitting the ground.
Mistake #3: Not Knowing Your Customers
One of the goals of your wholesale business is to offer products and services to customers. Who are the customers? What do they want or need that you can provide? How do they feel about your delivery methods and your customer service?
Come to think of it, did you even scout your customer base before starting your business? When starting a wholesale business, you have obviously identified a need and you want to be able to meet it. But who did you find that actually has that need?
Who are your customers?
Customers are what make your business. If you have existing customers, what is your relationship with them? Even after getting customers, you still need to establish a good relationship with them that will make them loyal to you. This is something new wholesalers tend to overlook, and this is what could drive customers away. Get to know them professionally as well as personally. Ask them about their preferences and how they rate your services so far. This makes them feel valued and important and even encourages them to bring you more customers.
Mistake #4: Preferential Customer Treatment
Another mistake wholesalers make in their first year is to treat customers unequally. This practice is bad for business.
All customers are valuable and important, no matter how much or how little or how often they do business with you. Unequal customer treatment isn’t something that you can hide either: the customers always know that’s what you are doing, and so those who feel slighted will leave.
Eventually, even the customers that you treated fine will leave on the premise that you can turn on them at any time, once you get a customer that does more business with you than they do. Preferential treatment of customers is wrong and should be avoided at all cost.
Mistake #5: Lack of Wholesaler-Customer Communication
Wholesalers need to keep in touch with their customers on a regular basis, providing them with all sorts of information that is necessary for the customer to know, such as order statuses, promotions, sales, maintenance, and other things happening in the company that customers may need to know about.
In this age, no one has any excuse for not keeping in touch with anyone. Wholesalers cannot be too busy to communicate with their customers. Autoresponder email sequences are available for them to use and stay in touch with their customers is faxing or calling is too much work. A lack of communication would make the customers feel under-valued and uncared for, thus causing them to take their business elsewhere.
These common mistakes are usually due to inexperience in the wholesale business. As such, new wholesalers should do their research well before starting a venture. A wholesale startup needs a lot of work and attention to detail, that some of these things are unintentionally ignored and are only noticed when they become a problem. These mistakes can be avoided, or found and dealt with immediately, thus establishing your wholesale business and setting it up for success.