What will I be doing?

You don't have to have a huge warehouse and sales staff to be a wholesaler. All you really need are product sources and retailers. Wholesalers are necessary because most manufacturers make zillions of one product and don't want to mess with selling four of them to a mom-and-pop store. If you can buy a couple hundred for resale, you could be a wholesaler.

Wholesaler of what? That depends. If you have knowledge or contacts within a specific industry, you can wholesale products from that industry to retailers. For example, you can wholesale specialized auto parts or pita bread or natural herbs in bulk. Stay away from more common products handled by large wholesalers.

What will I need to start?

First, you need a product to wholesale and a retail group to sell to. If you have both, great! But most small wholesalers have more knowledge of either one or the other. They may have experience as or working for retailers and know their needs. Or they may have an understanding of one or more manufacturers or product lines and want to wholesale them to retailers.

You may also need some storage space, but it doesn't have to be in your home. You can rent a portion or entire warehouse. Or you can specialize in selling products that are shipped directly from the manufacturer to the retailer--but be careful as one or the other might decide to work directly and cut you out of the picture.

Who will my customers be?

Your customers will be retail businesses who need smaller quantities of one or more product than the manufacturer wants to mess with. Which retailers depends on what you're wholesaling. You may be a floral wholesaler buying flowers in quantity from large growers and selling them to retailers. Or your customers may be specialty grocery stores that want products they can't get from their primary wholesaler, such as imported curry, canned snails or real sourdough yeast.

How much should I charge?

Wholesalers are paid by commission on the value of products sold. It's typically a percent of the retail price such as 5 to 15 percent. A case of spices that the importer prices at $40 may sell at $45 to $60 to a specialty store that marks it up to $100 or more. You don't make as much money per-case as the retailer does, but you make it up in volume selling to many stores.

How much will I make?

Overhead expenses for your wholesale operation can range from 10 to 35 percent of income depending on whether you have to warehouse your products. A wholesaler's net income, once established, can be $25,000 to $80,000 or more, with most one-person, home-based operations on the lower end of the scale for the first few years.

How can I get started?

Look around for a specialty item or line that isn't being offered efficiently or widely in your area. It may involve a specialized food or product. If you were raised or spent time in a foreign country, consider what products you know about that may do well here in a specific market. You may find both a resource and a market for authentic Korean kimchee or fresh Mexican tamale husks. Consider visiting specialty retailers in your area, asking the owner or manager what products they would like to buy wholesale that they're not getting now. With enough potential, you could be their new wholesaler.

The SIC code for general wholesalers is 5199-77. However, wholesalers of specific products have other SIC codes.

How can I use computers to increase profits?

Wholesaling is an information game. The more you know about your products, your suppliers, you buyers, and the marketplace, the more you will profit. That's where the computer shines: gathering and tracking information. Most successful wholesalers have websites for selling their products. Others rely heavily on electronic mail or e-mail. If you haven't done so already, start taking classes and reading books on how to conduct business -- wholesale and retail -- in the Internet. It's called e-commerce and it's the direction that business is moving.