The Pros and Cons of Starting an Online Wholesale Business in 2021

ECommerce is on the rise. Nowadays, having a solid online presence is imperative to stay in the game. Wholesalers have to keep up with the changing market trends to hold their course. Most of us only focus on the positive impacts of a web presence on the business. But!

Retail is the most common e-commerce business model. As a retailer, you create or acquire products and sell them directly to consumers at a price that is high enough for you to make a profit and stay in business.

When you are a wholesaler, your business receives discounted prices on a large number of products by purchasing directly from the manufacturer or importer. You can focus your efforts on a particular product or a whole line of related products. As a wholesaler, you sell these products to retailers, who then sell these products to your personal buyers.

That sounds pretty simple. This is not a particularly complex business model. However, there are some steps you can take to begin the process of preparation for mediation. We'll cover the ones below, so keep reading.

Are there any cons to it? Is setting up an online business a good decision in all aspects? Or do you need to reconsider the decision?

We will explore the answers to these questions in this blog. Stay with us and figure out the pros and cons of starting an online business.

Pros to Start Wholesale Business Online

Although there are endless benefits to eCommerce, we will mention some most common advantages of online business here.

1. Infinite Reach

The most significant and visible benefit of having an online store is the infinite business reach. You can expand your wholesale business across the globe with just a set of the right marketing strategies. With a physical store, you can only impact the customers from a specific area or a country may be. But it still needs a lot of time and effort to grow into an international name. Setting up a wholesale business allows you to explore new realms of growth. You can do business with people worldwide. All you need is a well-functioning website backed up with international shipping services.

1. 24/7 Shopping Opportunity

You can open a physical store for business for a specific period of time. Even if someone is offering 24/7 services, it would cost a lot. Extra staff, energy resources, and many other things would be needed to keep the store open 24/7. But with an online wholesale business, you only have to get a website and buyers can reach you throughout the day. The customers can shop without any restriction of time or place.

1. Consistent Buyer Interaction

Wholesaling is all about vendor-customer relationships but many wholesalers lose their chance of changing a prospect into a loyal customer due to poor interactions with the customers. Setting up an online wholesale business allows you to keep up with the expectations of the customers. Customer relationship management tools help wholesalers follow up with the customers and maintain consistent interaction with them.

1. Mobility

Today every buyer wants independence in shopping. Be it, individual customers or retailers, everyone seeks ease of shopping. Business websites provide this freedom to customers. The clients can easily browse through the online store on their mobile gadgets anywhere at any time and place orders. 

1. Lower Overhead Costs

Maintaining a physical store is quite a chore. It involves many expenses. The staff salaries, electricity bills, and store maintenance are a few expenses to mention. However, with online stores, you don't need to worry about overhead expenses.

1. More Marketing Opportunities

There are way more opportunities to market your products online. The promotions are cost-effective too. You don't have to pay a huge sum to show your products on the billboards. The online advertising costs are lower as compared to offline marketing efforts. You can also avoid marketing costs altogether by driving traffic through organic content. You can also make use of wholesale marketplace platforms.

The Cons of Online Wholesale Business

As every good thing has a downside. There are some problems that come along with the benefits of online business.

1. Website Maintenance

Maintaining a website is not that easy. Designing, hosting, and securing a professional website come with a cost. Professionals are hired to maintain the website. It should be updated according to the ongoing trends to retain the customers. 

1. Legal Issues

You can't just wake up and start an online business. Ecommerce has certain rules and following the eCommerce laws can be a challenge for the business. The taxation policy, customer rights, and laws of selling online should be considered before starting an online wholesale business.

1. Physical Inventory Management

Even though you don't need a physical store to sell. But as a wholesaler, you would still have a good volume of inventory and you need to manage it in storage space. Maintaining inventory in the warehouse effectively is an arduous task along with managing an online store.

1. Security

The most important concern while starting an online business is the security issue. The customer provides their information while placing an order, this data should be saved for customer security. In the case of online payment, securing the credit card data and other payment information is an even bigger challenge for the company.

1. Uncertainty

Despite the comfort it extends, customers don't feel at ease while shopping online. The clients cannot try the product or feel the quality. They have to trust the company and their sense of sight solely while ordering online. This takes the factor of reliability away from online shopping.

Take the Leap!

We have discussed some major pros and cons of setting up an online wholesale business. But it goes without saying that e-commerce is the need of the hour. Wholesalers must keep up with the changing trends to sustain their momentum. Do your research, identify the pros, consider the cons and figure out ways to avoid them beforehand. Take the plunge and conquer the online wholesale world!