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Starting your own business can feel overwhelming and intimidating. However, with some quick tips you can avoid some common mistakes that are made. The good thing about Wholesale Liquidation is you can start small or go big depending on your strategy and long-term goals. So that is exactly where you want to start.
Nothing is more important than understanding your vision and long-term goals for your business. Why are you going into business and what ultimately do you want from the business? Spending time to really gain clarity in this area cannot be overstated. Is your goal to make some extra money? Is this a hobby business? Do you want to make this business your primary income source? Is your goal to leave your W-2 job? These are just some of the questions you want to ask yourself. Additionally, the business ultimately needs to serve you and not you serving the business. What are the things you always wanted in life but seemed too difficult to attain? It can be material things or it can be time freedom to spend how you want. Many people create a vision board to they can visually see the things they want from their business and in life. Regardless of what your goals and vision are, spending the time to understand those things will be foundational to your success as a business owner.
Your strategy for what and how you sell products is also crucial to understand prior to going into business. Are you looking to sell retail in a storefront? Are you looking to do an e-commerce store that mainly ships products? Are you looking to looking to sell to other businesses (B2B) or to the end customer (B2C)? What type of products will you sell, general merchandise or specializing in specific types of products such as clothing or tools? How will you be marketing your products? Are you looking to maximize profits or do you prioritize moving merchandise more quickly? Answering questions like these will help you outline your strategy positioning your business for success.
The next thing you will want to do is obtain a federal EIN number, appropriate vendor’s license, and registration from your state. We will go over these things in more detail in future articles.
Wholesale Liquidation doesn’t require much capital to begin. If you are looking to start small, you can begin with a single pallet. Depending on the type of pallet that investment can be as low as $100. Bear in mind that the lower the price of the pallet, the more labor is typically involved in reselling the product. For example, you may have products that are missing parts and may need to be creative about how get that product working to resell it. We recommend that you start with pallets that have merchandise that is cleaner because it is easier to resell. However, if you are a handy person, the return on investment on the low-priced pallets can be substantial.
Some decide that they want to “go big or go home.” We admire and respect this resolve. However, if you are planning to do that, it is highly recommended that you find some like-minded, trustworthy individuals to form a partnership. There is a considerable amount of labor involved in processing truckloads of merchandise, and trying to run the business while managing through that inventory is daunting for one or even two people. It can be done, and you might be the right person to get it done, just be aware that there will be long days involved.
In conclusion, starting your own business is exciting and rewarding. The Wholesale Liquidation industry offers tremendous opportunity for you to create a lucrative business. Spending some time understanding why you want to go into business, what you want from your business, and how it ties into your long-term goals will help you set a great foundation. Understanding your strategy and how you plan to operate the business will put your business in the best position to succeed.
In our next article we are going to take a look at sourcing products and how to avoid pitfalls.