A “Home-based Wholesale Distribution Business” sounds like an enormous and perhaps even frightening undertaking, but with the right planning and strategy, it can be done by almost anyone. Although the rules of the game are always changing, and there are vast and often challenging logistics to overcome, in the end the nature of the business has not changed throughout history, and a few simple truths will always hold fast. There are also a few new things to keep in mind, as well.

Commitment for getting into the business is an important factor, since the amount of time and energy that needs to be put into the planning and execution of a small-scale wholesale distribution business will be rather large, especially in the beginning. Those who are looking to supplement their income, make up for a lost job, or prepare for the possibility of a layoff, should keep this mind. As always, the risks can be greatly outweighed by the rewards, but only if initial steps are taken to ensure a properly laid foundation.

Knowing What They Already Know

Manufacturers rely upon brokers to distribute the goods they make, since the time and resources needed to do this are not always in line with their facility’s capabilities. While more and more manufacturers are turning to the jack of all trades model that has been spurred on by a recently turbulent economy, the truth is that most of these companies would rather not do it for themselves.

Retail distributors are the ones who most consumers buy from. They move the product to physical locations, and turn it over to be sold to the public at the highest prices. A small-scale operation has some advantage over them, however. While the retailers have warehouses, extra staff, and corporate support, the small distributor can be a more personalized choice for consumers who are not finding their needs met by a one size fits all big box retailer or mega-store.

Owners of wholesale distributorships will be buying goods to sell at a profit, just as any other business would. The biggest difference is that many independent distributors will be working in a B2C realm, by selling to the buying public.

Making It Happen

When it comes to setting a virtual or even a physical shop, needs will vary according to what type of product the seller chooses to specialize in. It used to be considered an act of folly to store goods in the home, since space requirements and other factors would undoubtedly hamper results. However, the high acceptance rate of dropshipping has nearly eliminated the need for warehousing in many areas of the business. It’s important to note that a distributor and a broker have different meanings when taking title and legal ownership of goods, so it’s important to be familiar with local policies.

The Industry at Large

Wholesale distribution is a substantial part of the economy. The business contributes almost 10% to the value of the nation’s GDP (private industry) while much of the existing distribution channels are broken up into small, privately held companies.

General merchandise and apparel sales represent another possibility for the new breed of wholesale distributors, because they rely heavily on end consumers, instead of retailers. Online sales have skyrocketed since 2008, and this kind of activity is projected to continue acceleration, say experts.

Getting a Piece of the Action

While this is good news for entrepreneurs, it also comes with unique risks. As the economy continues to present challenges to mid-size companies that struggle with their inventories and staff, larger companies are merging or acquiring them. This means that consolidation issues are a factor for all of the smaller players. On the other hand, this very issue could provide opportunities for sellers who are creative.

The trend in consolidation that has some medium-sized companies cringing, is also the same thing that fuels the specialty industry. Specialty markets are difficult and often not cost-effective for large retailers to attempt, so the smaller ones are able to quickly move in to fill this void. Rather than looking at it as “picking up the scraps,” it’s a matter of taking care of customers who would otherwise find themselves with limited choices in a market that has little excuse to make such a distinction.

Personality Matters

Taking on the challenges of wholesale distribution and selling is a game that requires seriously keen negotiating skills, and oftentimes a thick skin. The ability to detect trends as they emerge, or to anticipate changes in the consumer mindset will be huge advantages as well. Many experts agree that having a varied career history can play a large role in giving an advantage. There is also evidence suggesting that former salespeople have the right blend of ingenuity and resources to make the switch to private entrepreneurship.