Three Mistakes to Avoid When Starting a Wholesale Distribution Business
If you want to start your wholesale distribution business, then you are here at the right place. There are several mistakes that you must avoid at all costs. With over three hundred thousand distributors in the USA, people cannot help but romanticize about starting a massive wholesale distribution business.
The problem and also the reason why they don’t succeed is that they integrate the wrong principles and end up failing.
So, if you want to start a wholesale distribution business the right way, you should avoid the following mistakes.
Do Not Take An Investment
A lot of potential distributors take in all that money, and they feel like they need to inject all that capital into their business to get it up and running, which is why they start spending tons of money – and it is not their money but someone else’s money.
You should know that good businesses are built with sweat equity, so instead of taking an investment, which is someone else’s money, to get a warehouse and stock the goods, you can start small with a storage unit and a lower amount of goods.
This entire thing of getting someone else’s money to make massive investments will not make you instantly rich. If you are going down the road of taking capital, you will surely lose it as you have no real-life experience of building a business in the first place.
Don’t Invest in Big Systems
Another beginner mistake that you must avoid at all costs is buying big systems. If you are looking for an ERP or a fancy route accounting system, the only thing that you should do is invest in such a system when you can justify your return on investment from one of the pieces of software that you invest in.
Initially, you shouldn’t even consider investing in any of these systems. Initially, the only thing that you should focus on is finding the right strategies that can help with going out and growing your business. In the beginning, the only things that should matter to you are how you can make more sales and generate revenue.
The bottom line is that systems are only good when they alleviate a tremendous amount of time and personal hours.
Do Not Rent A Warehouse
Never make the mistake of renting a big warehouse in the beginning. All successful distributors that you see today, or the ones that you look up to and who are your source of inspiration, all started small – probably out of their garage.
So, initially, when you are looking for ways to kickstart your wholesale distribution business, be content to start from your garage. On that note, you might want to get in touch with a self storage business and get a storage unit as your starting point.
The thing is that we advise you to start small – even very small. Subsequently, little by little, when you start to sell and acquire more customers for your business, you can grow your business and shift to a bigger storage unit until you reach the point where you are all set to get a warehouse.