Setting up Wholesalers

robert_harper_2000

I run a family shop, I need to either put up prices or buy cheaper! I thought why don't I setup another company, a wholesaler and supply myself the same products but at wholesale rates.

I was hoping to contact Companies House and set it up.

What would the advantages and disadvantages to doing this?

Cheers,

Tooticky

I'm confused (don't worry it doesn't take much) If you can buy the goods in at the wholesale rate for your new venture, why don't you just do it with your current venture and save yourself a whole lot of paperwork and costs?

robert_harper_2000

Shops can only buy at trade but a wholesaler could buy at wholesale. Wholesale is cheaper than trade as they need to make their cut, shops would buy from a wholesaler as they don't need to buy the bulk.

The trade prices protects the wholesaler basically as he wouldn't want shops to buy as cheap as him.

If that makes sense?? lol

COOLTRIKERCHICK

but surely you would have to buy mega loads of one item? and i mean tons or pallet fulls

and is it worth it ? as wholesalers work on volume/ quick turn around bulk sales for their profit.....so they might only make literally pennies on items....

i dont know what your shop sells... if its a general stores..... then its not going to be worth it as you up against the sell by dates to move/sell your stock.....

also think about the money that will be tied up in buying the bulk stock.. will the slight increase in profit cover the cost of borrowing or the interest you wil lose out on by having that money in a savers account

robert_harper_2000

/Well that's what I thought, that you would have to order lots of one product. But other people have mentioned dropship? I thought I could drop-ship the most popuar lines to myself and perhaps supply other shops.

I wanted to know what their margins were so that I could check it out as a possibility.

Cheers,

COOLTRIKERCHICK

dropshipping....... i have heard various stories about that.......... what i can make out its not that cheap..... and sometimes they not as quick on delivering.......

is it worth al the hassle for a few extra pennies...extra profit?

another alternative to to try and find new and diff products.... maybe..

dont know what type of shop you have..... so sorry if my suggestions are a bit vague

robert_harper_2000

no not vague, you are right. We always strive to find different products new and exciting things. It is very important, helps keep us ahead of the competition.

Just wanted to explore all avenues - if we buy cheap we can compete with the Internet and keep prices low.

Appreciate your advice though, do you run a business?

Sarah-Jane_2

If you set up a wholesalers with the intention of supplying yourself it gets really complicated with the vat etc. You'd be better off importing your own stock for selling in your shop because you could get it cheaper than you will from your current suppliers. If you have too much of a certain item because you've had to buy in min.quantities from suppliers then maybe ebay some?

What kind of shop do you have?

COOLTRIKERCHICK

robert_harper_2000 wrote: »

do you run a business?

yes........i have had a few businesses over the years.... some very successfull some that went belly up.....

so i have learned my lesson the hard way......wish there were places like mse and the internet 20 odd years ago.......thyey might have put me straight when the 80's high interests etc was in full force....

robert_harper_2000

Sarah-Jane wrote: »

What kind of shop do you have?

I run a pet shop, I would like to get some nice new cages and get offers on my pet foods. I've got good deals from my wholesalers but thought becoming a wholesaler would enable me to go a step further. Just wondered why some of the larger ones hadn't done it!

I do an accountant if VAT gets complicated but wouldn't mind extra work if it helps me get offers!

robert_harper_2000

trying to wean myself away from tescos.....:eek: to support local independant traders

I like your signature, perhaps it helps having run businesses! Just wish our politicians would think like this!