The Wholesale Business Blog

In an Associated Press article today, it was revealed that only a mere 0.1 % increase in spending occurred during the month of September. It is the smallest increase in over 10 months, and not shedding a promising light on business for wholesalers of nondurable goods such as clothing and food.

The article, available here, states that

Even though consumers spent respectably during the July-to-September quarter as a whole, the economy grew at a feeble pace of 1.6 percent, the slowest in more than three years. The culprit in the slowdown: the slumping housing market, which shaved just over 1 percentage point from overall economic activity.

It’s not hard to believe that the economy didn’t grow as expected. Even with the declining cost of gasoline and energy, consumers are thinking more about savings. With the Holidays right around the corner, a slight economic growth may occur, but it is likely most people will be skimping in gift-giving this year and concentrating more on their future finances.

Economists, meanwhile, are hopeful the current October-to-December quarter will turn out to be better and that the housing slump will not be a significant drag on overall economic activity. In addition, lower energy prices should help out, taking pressure off consumers and businesses and making them more inclined to spend and invest.

I disagree. With interest rates low, cars and homes are a great buy and are beating out consumer goods for the market. (The housing market is terrible for sellers right now, and will likely have them losing a great deal of money on homes they purchased during the housing boom!) Investments will likely increase, but consumers are probably not going to feel compelled to spend on consumer goods.

This news is an important indicator as to the health of America’s import/export business.

Singapore’s domestic and foreign wholesale trade indices grew 7.5 percent and 15.4 percent respectively in the first quarter of 2006 in comparison with the same period last year.

According to the figures released by Singapore Department of Statistics (SDS) Monday, the general wholesale trade sector and the ship chandlers and bunkering sector led the growth of the domestic wholesale trade by expanding 61.6 percent and 37.8 percent respectively in the first quarter of this year.

The electronic components sector and the telecommunications and computers sector also registered double-digit increases in domestic wholesale in the first quarter, while domestic wholesaling of the food, beverages and tobacco sector, the timber, paints and construction materials sector and the petroleum and petroleum products sector contracted year-on-year in the same period.

The ship chandlers and bunkering sector, which rose 63.5 percent in the first quarter of 2006 over the previous year, remained the major growth contributor to the foreign wholesale trade.

The wholesaling of electronic components, petroleum and petroleum products, general wholesale trade and other wholesale trade outside Singapore saw double-digit increases in the quarter.

The foreign wholesaling of timber, paints and construction materials, food, beverages and tobacco, as well as household equipment and furniture, declined in the quarter ending in March 2006.

Source: Xinhua

China’s wholesale trade is likely growing because of the declining American economy pushing retailers and resellers to lower prices. In order to do so, products must be sourced from overseas, where the output is higher and wholesale prices are lower. It’s disturbing to see that China is making a LARGE profit off of America’s increase in poverty. And what’s more disturbing, is that more Americans will likely lose jobs because of the products available overseas - thus leading to even worse economic conditions in the U.S.

An article in the Washington Post on May 16th states,

“A Labor Department report showed wholesale prices jumped by 0.9 percent in April, the most in seven months. The main culprit behind the rise: soaring costs for gasoline and other energy products.”

“Global competition is forcing some U.S. companies to absorb higher prices for energy and raw materials out of their profits rather than through boosting customers’ prices.”

Some American wholesale companies are not necessarily importing goods and lowering prices, but ARE taking a big hit in order to remain competitive. Obviously a company can only do this for so long, before needing to outsource products overseas, or face going out of business. So what of the manufacturer? Will the U.S. be unable to continue manufacturing our own goods due to the increasing cost of resources?

It’s one thing to start a wholesale business. It’s another to get the word out and bring in clients. You’ll likely be so busy with warehousing and product development/acquisition, that you’ll have little time for making sales calls or handing out business cards.

THE WEB
The Internet has afforded small businesses an incredible and easy way to create a business presence and build career-long business relationships.

1. Search Engines - giants like Google and MSN can fast-forward your online business with a few cents a click! Gone are the days of meta tags and pages riddled with keywords, and here are the days of pay-per-click sponsorships and high-ranking results. Take the term, “wholesale jewelry”, for example. If you are a wholesaler, manufacturer, importer or distributor of jewelry, you NEED to be purchasing Google AdWords on the keyword “wholesale jewelry.” For a mere 80 cents per click, your company could be the very first listing a visitor sees when searching for that phrase. And for lesser amounts, you could guarantee first-page placement on the right sidebar.

But simply creating an ad doesn’t cut it. You need to have the catchiest and BEST ad out there so yours will be clicked. A click is a lead and a lead could be a sale. You don’t want to lose it.

If your web site allows for online ordering, Google will even track whether their click resulted in a purchase! By simply pasting some conversion code into your shopping cart, you can see the result in your adminstration area. And it’s real-time!

MSN, Excite, and other search engines use Mamma Media for their pay-per-click solutions.

2. Directories - Yes, I’m going to advertise my competitors here. Because I strongly believe that your wholesale business should be in EVERY wholesale directory the web has to offer. Whether they’re a set membership fee, or a pay-per-click plan, online directories are a MUST for your wholesale business listing. Not only do they expose your link to more targetted visitors than the typical search engines, they also provide quality “Links In,” which are important towards site ranking in the major engines. Every link pointing to your site from another is valuable! Some of the more popular directories are WholesaleB2B, WholesaleCentral, GoWholesale, WholesaleGopher, TopTenWholesale, Top Wholesale Suppliers, and WholesaleRamp.

PRINT
You’ll also need to create a print advertising budget so that you can target those buyers who may not be using the Internet to source products.

Some of the magazines you’ll want to advertise in are: Web Wholesaler, The Merchandiser (East, Midwest, and Western), Cover Magazine, The Closeout News, Wholesale Source, Retailer’s Forum, and Swap Meet.

Most of these magazines are published monthly and will allow you to frequently change your ad so you can concentrate on specific holidays, sales you’re running, etc.

TRADE SHOWS
Buyers attend trade shows to see not only the latest product offerings, but to meet new product providers. Having a booth at a trade show will allow you to personally market your business face-to-face in an environment that offers no typical office distractions like ringing phones or email alerts. A booth may cost you a pretty penny, as will the banner to hang in it and the print materials to hand out, but it is a sure way to build business relationships and should never be overlooked. You need to make the budget for it and exhibit at as many that are relevant to yours business, as you can find. Visit our tradeshow calender for upcoming industry shows.

Obviously all of these methods take a budget. But you’ll find that by utilizing as many advertising methods as possible, you’ll start bringing in the bucks to fund them. And then some.

My name is Tiffany Anthony, and I am the owner of The Wholesale Business Blog and WholesaleB2B.com.

You may recognize my name, as I’ve been a part of the wholesale industry for over 4 years. Companies I have worked for include:

- Sumner Communications, Inc. (wholesalecentral.com, closeoutcentral.com)
- ALDNet Media Group, LLC. (former owners of wholesale411.com)
- JP Communications, Inc. (toptenwholesale.com, wholesaleU.com)

I’ve taken the experience working with these companies, as well as my experience as a small online retailer, and designed a free resource for retailers and resellers to access information and supplier listings in one place (wholesaleb2b.com.)

This blog will be a place where you can get updated information about the retail AND wholesale industries, including tips for web marketing, print advertising, starting a business, and more. Be sure to bookmark and visit often for the latest information.

I hope that you’ll not only read these posts, but comment on them and interact with others. Registration to post comments is completely FREE and encouraged. I am hopeful that some of you will also want to regularly contribute your expertise to help others. Feel free to email me if you’d like to become a blogger here.

Articles I’ve written on other wholesale blogs:

• Tradeshow Marketing
• Where to Eat in Vegas
• Making It Easy to Access Wholesale Information
• Keys to Successful Print Ads

Thanks, and enjoy!