How to Start a Wholesale Business in India – Perfect Step By Step Guide 2022

Wholesale business is the second mandatory supplier after manufacture to sustain the business world and economy of every country of the world.

The manufacturer is not able to sell his products to retailers directly in a less quantity, and that’s why the most important role of the wholesalers is introduced.

None of the countries in the world which does not have wholesalers, because wholesalers are one of the most important keys to running the business chain.

So, if you want to start a wholesale business in India, you have a huge scope to build a successful business model.

Wholesale business contains a huge investment with financial backup, i.e. if you are investing 7 lakh rupees for business, you should have at least 3 lakhs rupees as a backup.

Financial backup is not the mandatory part, but the presence of finance backup keeps you stable in the market without revenue.

Because the nature of business is not like a job that you start anytime and on the 1st of next month, your bank account will be credited your salary, right?

Business is time taking progress, and it will take some months to become stable, and till that time, it’s compulsory to sustain the business with low revenue or without revenue.

Why You Should Start a Wholesale Business?

start a wholesale buisness in india

This is a very important question. Why should you start a wholesale business, is the wholesale business model profitable?

The answer is: Yes, the wholesale business model is very profitable in itself, and nowadays, after the revolution of technology, it has become more profitable.

The nature of the wholesale business model is quite different from the retail business.

In the retail business, selling volume is limited and the margin per product is high, whereas, in the wholesale business, you deal in hundreds of pieces of products with low-profit margin.

Let’s suppose you are a wholesaler of garments business, so you will be dealing with a minimum of 150 pieces with every customer.

In the garment industry, the profit margin per piece is around 15-20 rupees, so if you sell 500 pieces every day, you can calculate the total revenue of the garment wholesaling business for a month.

It’s your gross profit, but excluding all the recurring expenses from the gross profit, you can get a really big amount as a net profit.

And these fundamentals are applicable for every wholesale business where you deal in the bulk numbers of products.

How to Start a Wholesale Business in India

Starting a wholesale business has a certain checklist and process that you need to follow. It contains some basic requirements that you should accomplish to start a wholesale business in India.

Another point that creates confusion is which wholesale business you should start because there are thousands of categories of products to start a wholesale business.

In this article, you will go through the wholesale business ideas along with the process of how to start a wholesale business in India.

Choose The Targeted Market

Well, the first step should be product selection, but it was applicable in the early 2000s when the technology was not developed as much as today.

But with the evolution of technology, the world is compressing, and the business world also is not excluded from it.

So with the evolution of technology, more opportunities are being opened for the business world.

You have to decide whether you want to capture only the local or regional market or the entire national market.

After deciding the market area for capturing, the next step is to decide the perfect product to start a wholesale business in India.

Selection of Product With Deep Market Research

A lady is seeing from the magnifier glass, which indicates that you should keep double attention while selecting the products to start a wholesale business in India

The selection of the right product is the foremost decision before starting a wholesale business in India.

In order to pick the right product niche for the wholesale business, you must conduct deep market research.

After you decide the area of the market to capture, you need to research the demand and supply for the products whatever you want to start the wholesale business for.

For example, if you want to start the grocery wholesale business, then you need to analyze the demand, manufacturing & manufacturers, how many wholesalers there are, how they are running their business, etc…

Along with this research, you need to analyze the potential of that particular product in the market, whether you start, after how many months your business can get stable.

Moreover, you need to read the blogs also about that product’s statistics and analyze them in-depth to get near to exact potential data.

There are many authentic sites to get these kinds of data for every business and you should refer to them with attention before selecting a product for the wholesale business.

Warehouse for Inventory Management

You must need a warehouse for inventory management from where you will be supplying the products to the retailers.

There is one benefit in wholesale business that the location doesn’t have too much importance like the retail business.

Because you are not going to target the walk-in audience, you can keep your warehouse anywhere you can get it at an affordable rental.

But while taking the advantage of this point, you should take care that you are not taking the warehouse where retailers avoid going. It means it should not be in the corner area of the city, which is too far from the center of the city.

In spite of you providing the delivery service, the local retailers will prefer to come to your warehouse for the product inspection, so it’s quite advisable to keep the warehouse in the nearby area.

Moreover, as long as your business becomes scalable and large, managing the inventory will become harder for you.

It is quite recommended that you build a team for inventory management and hand over the work of surveillance to one leader as a supervisor.

Business Registration

registration to start a wholesale business in India

Wholesale business can be started on a small scale and a huge scale as well, but I advise you to register your business with the government as properties IP, or LLP company, or else another firm whichever is suitable for you.

Whenever your business will grow at a high speed, and you will need external funding for more growth, you can apply for the business loan to the government authorities if you have registered business, and follow all the guidelines and rules & regulations.

You can take the help of your CA or lawyer to register your business, or else you can apply online as well, but the recommended way is to take the help of a CA or a lawyer.

Driving The Customers

This is one of the most important steps and one of the strongest pillars of your wholesale business, without customers, business doesn’t exist.

In the beginning, you would not get hundreds of customers, you will get fewer customers, and you need to satisfy them with your service and product qualities.

Moreover, marketing is the mandatory aspect to grow your business, and you are supposed to adopt both online and offline marketing strategies.

You will have to conduct many important steps to drive more customers to your wholesale business.

  • Give the better offers to the retailers
  • Convey the awesome customer service
  • Provide the seamless delivery service on time
  • Give the suggestions to the retailers

Note one thing here, most of the potential customers are retailers, and they will be looking for the best deals so that they can increase their profit margin.

And that is why I have mentioned the above important points in the bullet so you can work on them firmly.

Now, as I mentioned at the beginning of the article, you should be clear about targeting the customers and capturing the market.

Marketing Strategy For Wholesale Business

Start a wholesale buisness, marketing planning

Starting a wholesale business is quite different from the retail business, the marketing strategies of a wholesale business are quite different from a retail business.

Of course, you need to adapt both online and offline marketing strategies.

For an offline marketing strategy, you need to give the different offers to your local new customers and convert them into loyal customers.

For online marketing, there are many B2B sites in India that will be gathering trusted buyers for you from throughout India.

You need to list your products with details on their portal, they will promote your products according to the package, and you will be getting the list of trusted customers for your wholesale business.

Apart from this, you can also start your own website, you can run the ads of your products on Google and social media as well.

These all are very powerful marketing platforms from where you can get a massive class of customers by spending a minimal amount.

These all are the basic steps for marketing, but if you want to make it in a proper way, I suggest you make a sales and marketing team.

Only 3-4 people are more than enough, in the beginning, you can introduce your family members as well because this task is not to be done the whole day, or like 8 hours per day.

If you want to grow your business smoothly, I suggest you hand over the sales and marketing task to a separate team or bunch of people who will be focusing only on sales and marketing.

Credit Cycle For Payments

In the wholesale business, once you become familiar with your customers, you should start a credit facility for your loyal customers.

You can give the credit according to the history of payment, and frequency of payment done by the customers.

25%, 30%, 50%, 70%, whatever, you can decide the credit amount which you will be giving.

It means if you want to give the 35% of the credit to any customers, then if the customer purchases the goods of 1 lakh rupees, then he needs to pay Rs 65,000/- on delivery, and he can pay the rest Rs 35,000/- later on a decided time.

While giving the credit facility, you need to decide the payment term as well, like he will be paying within 15 days, or 30 days, or 45 days, or whatever y0u decide, and if he fails to pay in the decided term, you can add the extra penalty as well.

Next, when you give the products on credit, you are supposed to add the interest amount as well, and it depends on the term of payment.

In order to learn how to decide the interest amount to add, you can consult with the existing business owner of wholesale near you.

Wholesale Business Profit

The wholesale business is a volume-oriented business, so you need to focus on volume instead of the percentage of profit per piece.

Even if you keep only 10 rupees profit per piece, you can earn up to 5,000/- per day, because selling 500 pieces per day for any wholesale business is not a big deal.

Typically, the profit ratio of profit margin on wholesale products is 20%-30%, but in the beginning, you should keep it around 10%-15% which will increase the base of the customers.

Accounting Management

Even though you start a wholesale business on a small scale, you will have to keep your account up to date.

Because the daily transaction will happen in a huge amount, you will be selling the products on credits to some customers, you need to track the data of expense, and recurring expense, and all that.

So, if you are not good at accounting, you should hire an accountant to manage the accountancy of your wholesale business.

There is a lot of accounting software that you can purchase any of them, and can manage all your accounting details with it.

Delivery Service

As long as you receive an order from your city or another city or state, you should take action for quick delivery.

Wholesaling business is not for just bulk selling, but service also matters a lot, if you fail to deliver proper service, your client will find your alternative soon.

So, you need to divide the exact focus of quality on services as well, which includes the delivery service, quick responding, replacement of damaged pieces, taking the feedback, and implementation.

Profitable Wholesale Business Ideas in India

There are 1,000+ categories of products with which you can start a wholesale business, and all are profitable.

Moreover, there are huge numbers of wholesale business ideas in India that you can start with a limited investment and huge investment as well.

You have to decide in which segment you want to start a wholesale business, and then you need to start research on it.

Even you face the problems to find profitable wholesale business ideas, there are many legit sites where you can find the same.

Conclusion on How to Start a Wholesale Business in India

I am damn sure, now you are not worried about how to start a wholesale business in India, and you have got all the required details from this article.

As usual, I recommend again to you to conduct deep market research before starting a wholesale business in any segment.

Because some wholesale businesses are evergreen and can be started anywhere from India, it will give you profit, and some are location-oriented.

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