13 reasons why wholesale business fail

13 REASONS WHY (WHOLESALE) SMALL BUSINESS FAIL

BUSINESS IS TOUGH AS SHIT

There are often 10 times more reasons why a business should fail than why it

should survive and thrive

From my experience running a custom t-shirt printing business, these are the 13 mostcommon reasons why a wholesale and

distribution business fails

REASONS WHY WHOLESALE

BUSINESSES FAIL

Playing in an Extremely Red Ocean – Bad Margin1

In this hyper-competitive business landscape, I can tell you that prices

will win most of the time

Not Keeping an Eye on Extended Credit2

Another huge killer of a wholesale business is giving too much and too

long credit terms just to secure a deal or to retain an old customer

Missing Out on Billing Customers or Over Paying Suppliers3

It may sound unbelievable, but it is more common than you think.

Procrastination and disorganization can all lead to this

If you’re using the EMERGE Cart features, customers can indent your products they want

directly from the app into your system.Hence, there’s no way that you will miss an

invoice or shipment

Too Much Dead Stock4

The stock is literally money

Hiring Ineffective Sales Reps5

They sell themselves backward during the interview but afterward, they can’t

sell your products to your customers

Best Sales Reps Moving to a Competitor & Bringing Customers Over6

This can be detrimental to your business as great reps could be

servicing the majority of your clients

Employee Leaving & Starting a Competing Business7

Similar to reps moving to a competitor, great reps starting a

competing business may quickly put you out of business

Sudden Fluctuation In Currency Exchange Rate8

If you’re extending credit terms in a fixed currency, a sudden negative fluctuation in exchange rates corresponding to your

purchase currency could erode your margins or even leave you belly up

Too High Product Loan Interest Rate9

If you’re financing your inventory with credits, you have to make sure you keep your eye on cash flow, sales and margins

really, really closely

Supplier Product Drops In Quality10

Have you realized recently that your customers are complaining about

your product’s quality or returns are increasing?

Supplier Not Extending Credit11

It’s really difficult to get suppliers to extend you credit when you have just

started buying stocks from them

Skyrocketing Shipping Cost12

In recent years, shipping costs have been pretty modest with low fuel prices

Inventory Lost Without Insurance Coverage13

A breakout fire could wipe everything that you have worked so hard for

BUSINESS IS TOUGH AND THERE’S NO

MAGIC PILL

You can certainly make use of technology to lower the risk of catastrophic failures such as investing in a wholesale order, purchase, and inventory management

system

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