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Important Things to Know Before Starting a Wholesale Distribution Business

Posted by Tradesquare on Oct 23, 2020 6:00:00 AM

So you want to start a wholesale distribution business. With the digital age today, the distribution industry has skyrocketed to new heights. Connectivity isn’t a problem, market research got a lot easier and the internet provides a wide platform for you to establish your business and branch out. 

However, starting a wholesale distribution business isn't a walk in the park. There are certain factors you need to consider before diving into this type of industry. Luckily, this article has you covered and we'll provide everything you need to know about before tackling this new business venture. 

Let’s get started. 


What Does a Wholesale Distributor Do?


First off, what does a wholesale distributor exactly do? In general, wholesale distributors serve as mediators between manufacturers and retailers. Technically, as a wholesale distributor, you purchase products directly from the manufacturer before proceeding to sell them to retail companies in bulk. Basically, the entire concept of the wholesale distributorship is more of a business-to-business operation where they sell their products or goods to retailers rather than towards the buying public. 


What is the Difference between a Wholesaler and a Distributor?

While they are both comparatively similar and work towards the same goal of selling goods, wholesalers are those who sell their products in bulk to retailers. While distributors, on the other hand, are the prime mediator between the manufacturer and other business entities. To put it simply, a wholesaler works more closely with retailers to support their needs through buying products in bulk whilst distributors work hand-in-hand with manufacturers to gain more visibility in their products.  


What are the 4 Types of Distribution?

Before you can get a head’s start at diving into the field of distribution, it’s imperative to be able to identify the 4 types of distribution strategies you can implement: 


Direct Distribution – This is where manufacturers send and sell their products directly to their consumers. This is a great option for companies that have a client base that is quite knowledgeable with technology and to even request solutions to meet their needs. 

Indirect Distribution - This involves intermediaries who assist with the logistics as well as the placement of the products in order for them to reach the consumers swiftly in a location that is based on their preferences or consumer habits.

Intensive Distribution – This is where the goods are distributed to as many retail locations as possible. Typically, items of this stature are considered to be routine purchases and that it barely involves much effort to sell, such for example, gum. 

Exclusive Distribution – This type of strategy brings more focus to the product in general and makes these particular items exclusive to stores or locations that are dedicated to these products. Luxury brands or items are some examples of this. 


What is the Best Wholesale Business to Start? 

At times like this where we are left with no other option but to stay homebound, you might be wondering how to start a wholesale business in the most profitable way possible? Well, there are actually a variety of options you can go to. Social media platforms or apps paved the way for people to be able to generate extra profit in the comforts of their own homes. 

Ideally, the best wholesale business to start is one that responds to market demand. Currently, one of the most profitable products you can sell wholesale online today is usually health care products. Alcohol, sanitizers, and even face masks are all considered essential items that are in high demand in the market today.

Hence, whichever works all depends on a number of conditions based on the market. That’s why creating a wholesale business plan is essential for you to get a concrete idea of your business structure, its operating procedures, and what to expect from your business. 


List of Wholesale Distributors 

Here’s a list of reputable wholesale distribution companies you can visit: 

  • Alibaba
  • Amazon



Every business venture starts with planning, research, and a keen eye for opportunity. It’s all about doing proper market research and getting a deeper understanding of what you are committing your finances to. The more committed and prepared you are, the quicker your success will be. 


Topics: wholesale australia, e-commerce, wholesale, online store, marketplace, b2b

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