A wholesale distributor sells bulk merchandise to retailers or other distributors. Wholesale distributors therefore deal with other businesses, as opposed to consumers. To become a wholesale distributor, you will want to take the following steps:

• Decide on what product(s) you want to carry: Do you want to specialize in just one type of product or do you want to carry a variety of products? One thing to consider in making this decision is how large you want your distribution business to be. If you plan to start out as a small operation, you may want to limit your focus to just one product area. Another thing to consider is whether you have special interest or knowledge in a particular product area. For instance, if you are a movie buff, perhaps you will want to sell wholesale DVDs. If you are into fashion, perhaps you will want to become a distributor of clothing or fashion accessories.
• Determine your costs: Once you've decided on the type of product(s) you want to sell, compile a list of manufacturers who produce the merchandise you are interested in. Find out what it will cost you to acquire these products in bulk, and make sure to take bulk shipping costs and overhead expenses into account.
• Determine your profit potential: Now that you know your costs, the next step you must take to become a wholesale distributor is to determine your potential profit margin. First, you'll want to find out the retail rates for the products you plan to carry. You can do this simply by going into stores you hope to target as customers, or by searching stores' websites on the Internet. You will also need to find out how much your competitors are charging retailers. Product sourcing websites, such as ASD SourceBook, feature searchable listings of thousands of wholesale distributors and the products they offer. Once you have an idea of your competitors' prices, you can compare that with your costs and with retail rates to get a sense of your potential profit margin.
• Decide how you want to sell your products: Do you plan to have your own store or warehouse? Will you have an online presence? Will you try to connect with retailers face-to-face or by telephone? Whichever avenue(s) you decide to use to connect with customers, make sure to factor in the associated costs.
• Draw up a business plan: Based on your expected expenses and revenues, draw up a business plan that takes into account how much merchandise you expect to move and who you think your customers will be. Make sure to consider the anticipated size of your staff in calculating your expenses, as well as things like delivery costs. For instance, will you use your own vehicle to deliver goods, will you need a fleet of vehicles, or will you use a third-party delivery service?

If you need to raise capital to launch your wholesale distribution business, you should present your business plan to a bank or private investors who might be able to provide you with start-up funding.

Once you have a solid business plan and the necessary capital to launch your business, you will need one more key ingredient to become a wholesale distributor: an effective means of connecting with potential customers. In order to minimize the costs associated with this, consider registering for product sourcing websites that offer to list your company and your products free-of-charge, such as ASD SourceBook.

Websites like these give thousands of retail merchandise buyers access to your company and your products, at no cost to you. Sign up for SourceBook and become a wholesale distributor today!