Storage for your Merchandise

Unless you are making your merchandise, you will be purchasing it from the manufacturer, importer, or distributor, known together as vendors. Distributors are companies that buy in very large volume from the manufacturer and whole sell only to businesses for resale purposes. Many manufacturers will only sell to distributors and not to retailers. To find a distributor of the type of items you intend to sell, you can do a search on Google, contact a manufacturer for a distributor in your area, buy a trade magazine, or visit a website geared towards the business side of what you are seeking to sell.

If you are going to be keeping what you are selling in stock, you'll need a place to store your inventory. If you're already a Brick and Mortar, you may already have the infrastructure you need to store your merchandise. If you will be storing your products, there are loads of options depending on how much merchandise you need to store, how big they are, and if there are any necessary climate conditions or other factors. Storage can range from a closet in your apartment, to a garage or basement, to a self-storage facility, to a storefront or warehouse. All have their benefits and problems and are based on how many things you're storing and how readily you want to be able to access them.

Here's an important rule that we will be returning to throughout setting up your business. When setting up your business, set it up for the future as well as now. Base your storage needs not just for today, but also for the future. If you have to rent or buy space for storage, don't buy exactly enough for when you start, think about what you will need when your business increases. Moving a large inventory of things is difficult and the possibility of damaging things is pretty good. Balance what you can afford with what you anticipate you will need.

There are alternatives to storing your own merchandise. One of the nice things about being an online retailer is that no one walks into your store, picks up something off the shelf and buys it. You don't need to have the product on a shelf, or the same amount of a product in stock that you would need if it were on a shelf in front of the customer. Fully stocked shelves are useful in a B&M, but not necessary in an online store. One of each product, or none if you can get it from your distributor in a reasonable amount of time, is perfectly acceptable. Many times a distributor or manufacturer will provide discounts for spending a certain dollar amount, or buying a certain number of products. Until you know what will sell, how often, and in what amount, especially in the beginning, it may be better to buy low amounts of each item even if you have to skip the discount. This way you don't tie up your capital on things that aren't selling quickly.

Some online retailers have easy access to their distributors, and are allowed to pick up the merchandise as it's ordered and just pack it and ship it without keeping anything in stock. The advantage is no storage costs or money tied up in inventory. The disadvantage is that you may not know what your distributor has in stock at any given time so when you go to pick it up, you discover they don't have it…and might not have it for another month. You also may not get as good prices as you would if buying in bulk, or from a further away distributor that's too far to pick up things as they are ordered.