Starting any type of business can be a risky venture, so I wanted to share some information that may be of some use to you if you are an Entrepreneur and are planning on starting a Electronics Wholesale business. It requires a lot of planning,capital investment, expertise and research.
1.) Conduct Market Research and find your Niche Product(s)- First thing you should do is try to figure out what type of electronics wholesaler you would like to become, whether you should concentrate on one product or various products. Do your research on trends and try to decide on what brands and types products sell the most. Like for example if you want to start to just sell smartphones one brand only, or various brands. Or perhaps you would like to sell all Apple Products such as tablets, airpods and macbooks. Whatever you decide to sell , It might be a good idea to sell accessories for the devices that you decide to sell in order to maximize revenue. Make sure you know exactly what you are going to sell and have a plan, before you take the next steps.
2.) Apply for License and Permits- One of the most essential parts of starting a business is having a license and permit, without it, you cannot operate any business legally. Research the laws in every state to make sure you understand and comply with local laws. It’s important to become familiar with the requirements for the types of licenses and permits you will need before you proceed. You can register on this site to apply https://www.sba.gov/business-guide/launch-your-business/apply-licenses-permits . Contact your local state tax office to obtain a state tax id number and IRS to help with setting up your EIN.
3.) Capital and Budget- You should always look to keep overhead costs low at all times, and have money set aside for upcoming expenses because the bills will stop coming and it might be difficult to grow in the beginning. In most cases, the expenses might exceed the actual revenue you are bringing in.
4.) Find a Location- Before you find a location , you should get a feel of the surrounding communities, you can spend some time doing research on businesses in that area to try to figure out if those businesses are doing well financially. Also, take in consideration before you commit to buying or leasing a property you have to make sure you know about all of the hidden costs such property taxes, also might be a good idea to allocate additional funds for miscellaneous such as renovation costs, like furniture or repair upgrades. If you are doing business locally, it would be a good idea to have your business within close proximity of other companies whom you do business with. And also you should make sure you are not spending too much on commuting back and fourth.
5.) Use a ERP system and CRM- ERP computer systems are internal computer programs used to manage daily business activities such as inventory, accounting, procurement, supply chain ,etc. CRM stands for Customer Relationship Management, it’s a database used to manage customers and track interactions. It’s also used to identify important data about your customers , like how long have they have been a partner, what products do they buy etc. It’s also a great tool for tracking leads , you can record data about their recent behavior and how they have been reacting to your email campaign efforts, social media posts etc. there’s a lot of useful functionality in these programs and they will help you to stay up to date.
6. Getting warehouse space– When you are starting out it’s important to make sure you will have enough space for the amount of inventory you plan on carrying, the types of machinery such as forklifts tools etc. that you will use, and other spaces where you can utilize for your employees like for ex; other depts and breakrooms. and make sure the lease fits in with your long term plans.
7.) Shipping Carriers- You want to make sure you have a accounts with reputable shipping carriers that handle your shipments in a fast and efficient manner. If you are an international shipper, it would be wise to consider using companies that specialize in customs. Shipping is really fast paced, you have to plan on how you are going to execute fulfillment very well so you can build long term customers.
8.) Seller Supplier and Customer Network -It’s good to have a solid network of professional sellers of goods so you know where to get an adequate supply from at all times.
9.) Hiring Staff- One should follow the hiring best practices for hiring staff . One should figure out the company identity and envision the culture also, what roles you will need to fill. You can recruit from industry events, Indeed and linkedin. Create a realistic job description for each role and look for people that have experience in the industry. The kinds of positions you should look to fill are Warehouse Clerks, Customer Service, Sales, Accounting, Buyers and Marketing. In my opinion for new businesses you should focus on being a customer centric company by offering really good customer service, so you should look to hiring a lot of sales people.
10.) Business Plan –Be sure to have a Solid Business Plan, having a clear direction on where you want to be in the short term as well as long term will help your new company stay focused on achieving goals and knowing each step required to succeed . You should also look revisit your plans every 6 months and setting goals should help you achieve success. I recommend that you use a template or specialized software to create one. In your business plan ,you can cover some of these points below.
- Summary about your Business– Be sure to keep it short and simple outlining the value proposition , you can also include a mission statement, information on your products and go to market strategy.
- Marketing Plan/SWOT Analysis- Planning and Strategy for Identifying Strengths ,Weakness , Opportunities and Threats.
- Market Analysis– Your market analysis should include information about the overall industry, identifying the target market and your competitors.
- Sales Goals/Strategy– It’s good to have some sort of sales goals set in place so you can implement a strategy and workflow to meet those goals like for example if your goal is do 1 million dollar in sales first year, you can break it down into 4 quarters to do at least 250k every quarter, assign your sales team to make over 100 calls every week. close at least 10 accounts a week etc.
- Financial Planning – It’s important assess your finances especially in the first year of business you have to watch for all of the expenses that you will incurring. Watch for setup costs , try to figure out profit and loss, identifying your breaking point, etc. Be sure set up a balance sheet to keep track to make sure you are not going over budget.
As I mentioned in the beginning, starting a Wholesale Business can be a risky venture but with a solid market demand , good product offering, planning strategy and know-how along with the drive to succeed ,you should do well.