Making money in the wholesaling business follows a simple formula: The wholesaling customer base may include retailers, contractors, institutions and individual merchants.

People most likely to succeed in this venue are those with a sales background, people skills and comfortable negotiating. Those uncomfortable with the operations and finance aspect of business should consider hiring experienced employees as your budget allows. This work varies from traditional retail in that instead of a business to consumer focus, there is a business-to-business focus. Choose a specialty market.

Consider your networking circle and the industries in which you are comfortable.

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Choosing products outside of those covered by national distributors can lead to greater success. Buy from the source. After conducting research in your specialty area, contact manufacturers directly to negotiate your purchase price.

Although you will usually receive discounts for buying in larger quantities, consider your resources such as revenue and storage space. Wholesalers succeed by possessing keen negotiation skills and recognizing best-selling items.

Wholesalers should ask themselves how much their customers are willing to pay for merchandise when setting prices.

If you believe your pricing is not maximizing results, raise prices on select items by 10 percent. Observe customer reactions, such as a drop in demand. Adjust the prices as necessary. Dependent on product size and quantity, you may find ample space in a home basement or require a space as large as a traditional warehouse.

If renting or buying warehouse space, choose a location near your customer base if possible. For instance, if you provide specialty products for plumbers, you may find that real estate is less expensive in the industrial area and nearer to your target audience. Set appointments to meet potential clients and ensure that you understand their needs. Also, strive to spend time where they do. This may include area chamber of commerce events, trade shows or golf courses.

Build a relationship by engaging them in conversation. In addition to networking, consider buying advertising in fitting trade journals or utilizing social media such as LinkedIn and Twitter. Keeping current customers takes fewer resources than procuring new ones. Strive to provide excellent service to retain your customer base while marketing to grow your business. Turn over inventory quickly. The more inventory you sell, the more money you make. Ensure that operations are streamlined and that neither labor nor other resources are being wasted.

Track your primary business indicators. If you observe a lack of positive results, brainstorm possible solutions. Ideas might include reading sales strategy books, hiring a consultant or taking a small-business class. Based in Eugene, Ore.

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Public Relations and Marketing for the Shy Person. She won the Mahan award in creative writing in and holds degrees in English and education with concentrations in journalism and psychology. Skip to main content. Brainstorm steps needed to achieve these goals. How to Start a Wholesale Distribution Business "Entrepreneur"; How to Buy and Sell Products for a Living; James Stephenson; June About the Author Based in Eugene, Ore.

A Simple Explanation of How to Make Money by Wholesaling Properties

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