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Rules of the Wholesale Game

Customer Analysis: The importance of the word “research” cannot be overemphasized in the context of wholesaling. Wholesaling is characterized by rock bottom margins, but they have sky-high volumes to compensate for the same. This makes it a very dangerous ground to play. If you order the wrong stock, it is almost certain that you will have to sell it for a loss. Yet, if you order the right stock, it will be flying out of your warehouse in no time. The key is to recognize the demand patters of customers and predict them successfully. Although this is easier said than done, “a good forecast” can turn a reseller’s fortune upside-down.┬áMonitoring goes a long way. This has its roots in the logic that demand patterns are not stochastic. They repeat themselves in circles and patterns. So if one can record the data and use it for statistical analysis, which help in uncovering such patterns, the guesses can be more accurate and can create the most correct demand forecast, which is the basis for a competitive advantage in the wholesale game.

Monitoring: The tool required to come up with a brilliant forecast is monitoring. There is no way that one can guess exactly, how many customers are going to come over tomorrow and demand what goods. But you don’t have to be exact; you only have to be good enough to beat your competitors.

Build Information System: Out of all the elements of a business, information is unique and very important to understand. Information can make you win or lose corporate battles. Successful wholesale organizations have one thing in common. They have state-of-the-art information systems. They understand that once the initial investment has been made, the incremental price of getting the additional piece of information is almost zero.

However the value that can be generated using information is much greater. For instance if your information tells you exactly how many goods you have at a given point of time, you do not have to store unnecessary goods and increase your costs. It is inevitable for every successful corporation to have robust information systems in the wholesale business simply because the margin for error is so small and only information allows you to prevent errors.