The Best business opportunities during recession

Gone are the days when you needed a hefty capital to start wholesale business and make your dreams, of becoming a wholesale entrepreneur, come true. In most cases, capital is believed to be the basic entry barrier but you must know that, before you actually start a wholesale business, there are some things to scrutinize. Prior to deciding the best business niche and the suppliers you would deal with, it is important to know some of the business opportunities, which can be commenced at low capital. Be very specific about the business niche, which you plan to deal in and adjust the wholesale business execution strategy accordingly.

First thing first, you got do proper research to find out the potential of your business niche in the market and what “value for money” it can offer. Identify your customer base and plan the business ideas, which can interest and intrigue that customer base. Secondly, at the beginning of your business, the storage space wouldn’t be much of an issue as you cannot start the business with all your cards in. Your house or a small place on rent can temporarily act as the warehouse.

Small Wholesale Business Opportunities!
Once you are done with the planning phase, the next step is to look for different business opportunities and find the best deal.

Financial Consultancy!
Due to market condition and economic downturn, it is highly recommended to begin with the financial consultancy for your wholesale business after deciding on the particular business opportunity. To wholesale traders lose their investments because they could not sell out wholesale products and services, is a common thing. If you have been wise right from the starting of your business by carefully researching and planning everything, you would be a position to offer professional advices to the suppliers who just couldn’t do that. If you do this consulting thing with more focus on the details and market research, wholesale business consulting could become your primary profession.

Food Business!
If you cannot offer a piece of advice to other wholesalers, you can start a low-cost food business at local level as it has the potential to go well in the recession. For instance, you can start delivering packaged food items to retail shops, large shopping malls or directly to office goers. Another way is to start delivering food items to retailers at discount rates or you may start delivering the spices in bulk such as salt, sugar, and dozens of other exotic spices which make the food irresistible.

Cosmetics Business!
Beauty products can never go out of demand because people, especially women can never stop spending money on their looks. At the point where you start your business, setting up a manufacturing plant for cosmetics would be too much to expect but becoming a wholesale cosmetic supplier would not be. These wholesale products have the potential to ensure steady flow of profit.

Full service wholesalers vs. Limited-function wholesalers

A wholesaler purchases directly from manufacturers, in large quantities and then sells the products to retailer, who then sells them to consumer. The difference between a wholesaler and retailer in this transaction is the nature of the customer they are selling to. A wholesaler is selling to another business for reselling purposes, while the retailer will be selling to the consumer, who is buying that product for his/her personal usage. Remember, this is just a general description of wholesaler and there can be some variations. For example, a wholesaler doesn’t always sell to a retailer, or sometimes a business listed as a retailer can act as a wholesaler when it sells a large quantity of products to another business for commercial use, and still this transaction will be regarded as a wholesale deal.

Full Service wholesalers:
As the name suggest, full service wholesalers offer a complete range of wholesaling services to their clients. These services are
Buying & Selling:
This is the very basic of wholesaler’s functions, buying directly from manufacturers in bulk and then selling it to the customers in smaller quantities, which suits both, the producers and the customers.
Providing storage facilities:
As stated above, wholesalers buy in large quantities, but they can not sell out these products right away, because the customers do not have the space to store these products. Hence, wholesalers take up the task to preserve these products in their warehouses.
Freight & Transport Services:
Again, buying in bulk and then storing the inventory at some place near to the consumer markets can reduce the cost of transportation; it also ensures a speedy delivery of the product on timely basis.
Expertise of Market:
Interaction with both producers and buyers allows them to understand the demands and limitations of both parties; in most cases they understand the market better than the producer, mainly because of their experience.
Apart from these, a full service wholesaler may also indulge in marketing the products, conducting surveys, and even providing after sales customer service.

Limited Service Wholesalers:
We are living in an era where the focus is shifting towards specialization from businesses that fall in jack-of-all-trade category. A business that specializes in any of the above mentioned services can provide much better service at much lower cost than any of the full service wholesaler. Another reason behind the rise of limited service wholesalers (e.g. drop shippers) is more and more people looking to start their own businesses. Since these individuals do not have financial or other resources to start as a full fledge wholesaler, they prefer offering limited services according to their expertise.

Different types of discounts you can offer to your customers

What are the two most attractive words, you can use in your advertisement to lure customers? Answer is Discount and Free, and although “Free” can pull much larger crowds as compared to “Discount”, you can’t really offer your products for free. Therefore, discount is a more practical, sensible and smart option to use. Different types of discounts and sales are very effective to curb the competition. It can also provide a good boost to your sales in the time of recession, when people are looking to save on every deal. However, offering discount on your products will obviously reduce the inflow of cash, therefore you need to chew over your discount strategy over and over, keeping in mind all costs and expenditures. In addition to this, there are some laws in developed countries that impose some restrictions on discounts; you need to confirm to these regulations as well.

Here are some of the discounts you can offer to your customers.

Quantity Based Discount:
You must have noticed a huge difference between wholesale and retail price. Whenever you buy something in large quantities you expect some discount from the seller. People are more than happy to offer low prices to a buyer who will purchase in large quantities because it allows the seller to save in many ways. But normally these quantities are too large for a normal consumer and only businesses can afford to purchase a product in these quantities, however you can offer some sort of off-price if the customer buy more than one units, for example 5% off if someone purchases 10 units or more.

Payment Based Discount:
If majority of your customers make purchase on credit then you can offer payment based discounts to these customers, tempting them to pay as soon as possible by offering a small discount on paying cash without delay. Prompt payments will save you all those collection costs and help you with daily expenditures of the business, as well.

Trade Discounts:
These are the discounts you have to offer to the middleman, be it the wholesaler, retailer or distributor, so that they can cover all costs of marketing that may be needed before the product reaches to the ultimate consumer. Trade discounts are in fact, the biggest of all.

Special Discount:
In some cases you can offer discounts to some specific group of customers to capture that special segment of the market. This niche group can be of students, house wives, doctors, your previous customers, small business owners or any other strategically targeted group.

Source:
Wholesale