How to start a wholesale fabric business online: a complete guide

In this article, we’re going to discuss how to start a wholesale fabric business online. But before we dive right into some important steps, we will talk about what a wholesale fabric business is in the first place, including the importance of understanding the wholesale fabric market.

The use of the internet has brought tremendous changes in the field of advertising and marketing since it eases the mode of marketing goods and services. It focuses on ensuring that you are able to obtain the appropriate services that are compliant with the law. Dealing with such an aspect primarily ensures that you receive the appropriate services that are compliant with the system. Because the benefits of doing business online outnumber its drawbacks, it remains a powerful instrument for conducting online promotion of services and products.

Starting your own business, and how to sell online can seem daunting, but with the right guidance and business plan, there are huge opportunities to ensure it is successful. Especially with the help of an eCommerce platform like Alibaba.com, you can kickstart and grow your business profitably.

Let’s first discuss what a wholesale fabric business is.

What is a wholesale fabric business?

Before you let your mind weave an entire wholesale business plan, it’s important to understand its essence, i.e., what is wholesale business?

The act of one business buying fabrics, and reselling them to another business or a consumer is known as a wholesale fabric business.¹

Orders in bigger quantities, as opposed to small quantities, are known as wholesale deals; these orders often have a lower cost per unit, allowing you to sell at a higher profit margin.

As a result, if you are a business or working on a project that requires a big volume, buying and fabric sourcing from a wholesaler is more cost-effective than buying and sourcing from a retailer.

If you were a dressmaker, for example, you would buy fabric for your garments from a wholesaler rather than from a fabric shop directly. This results in huge cost reductions.

Wholesalers are sort of mediators between manufacturers and retailers. This puts them somewhere in the middle of the supply chain.

Let’s discuss wholesale fabric and the importance of understanding the wholesale fabric market.

Understanding wholesale fabric market

Fabrics are cotton clothes that are designed brightly and authentically. The activity of having these types of clothes is mainly aimed at matching the style. Primarily these sorts of items that are offered online are mostly centered on the style and marketing strategy by knowing who the target groups are. It demands a lot of absolute expertise in knowing the market trend and then being in a position to strategize all goals needed to guarantee that you grow successfully.

Knowing your market is arguably the best place to start, but it is also the most commonly missed step. It’s all well and good knowing that you want to sell fabrics, and how much you want to make. But that might not be realistic. Check out what your competitors are offering. Is it luxury fabric? Is it a certain pattern? Is this because it’s easier to produce or is that just where the demand is? What are they charging? Most importantly, what can you offer that they simply don’t? If you can do this, then this is a great place to try and work out what sells well and what doesn’t.

Trade shows are like little hidden gems. You can often find a wholesaler there to purchase from, and you can usually compare a few as they’ll flock there, all with their shiny proposals to try and bring retailers on board.

Being a bulk distributor in the fabric world is tough. You may face many challenges before you achieve success. However, great marketing and one that is effective can help you rise the ladder faster.

Here are 11 steps and ideas to help get you get started with an online wholesale fabric business.

11 steps to start a wholesale fabric business online

1. Pick a niche

There are so many different sorts and styles of fabrics available that it's impossible to sell them all. It’s best to determine the kind of garments and clothing line that you'll sell in your wholesale business.

Choosing a niche entails not just deciding what kind of garments to offer, but also deciding on the type of clientele you'll be catering to. If you want to sell fabrics for t-shirts, for example, figure out what kind of stores you'll sell them to. Will you sell to a bargain or a high-end retail store? Will you sell to men's, women's, or children's retailers?

You may narrow your focus even further and brand yourself to appeal to a very particular target market of new designers. This might be related to the style of fabric or the manufacturing process. For example, sustainable fashion is currently a hot trend among fashion designers in the fashion industry. Finding this type of edge might help you connect with your audience more effectively.

Everything from writing a business strategy to marketing and selling your clothing line will be easier if you have a clear notion of the sort of fabrics you'll sell and who your target client is.

2. Create a business plan

With so many different parts to a wholesale online business, it’s advisable to draw out a business plan as it will help you to outline what your business will be, what you hope to achieve, and how you will achieve it. Additionally, a business plan gives you a sense of direction, helping you navigate through the initial starting phase, which is always the hardest.

Be sure that your plan includes a summary, an overview of the company and structure, and an in-depth market analysis. The market analysis is key because it shows whether or not you've done research to figure out if there is enough of a demand to keep your business running. A lack of market demand is one of the biggest reasons small businesses fail.

Also, list some manufacturers you might be working with and their prices. This is important for you in creating a cost analysis and estimating when you might turn a profit to start making money.

3. License and permits

Licensing and permits will be an important element of your research process when it comes down to establishing a wholesale business. The laws on this differ from state to state. A wholesale license is known by several names in different jurisdictions; some states refer to it as a "resale license" since it permits you to resell items.

For information on how to get a wholesale license, contact your state's tax authority. You can also contact your Secretary of State's office if you require any additional business licenses or permits.

4. Employer identification number

You'll also want to apply for an employer identification number. If you're starting a wholesale business, you'll need it to file taxes among other things. You can apply online directly, or you can apply by fax or mail. Applying online is quick and you can get your EIN in a matter of minutes. Not all entity types are required to have an EIN (sole proprietorships that don't have employees file taxes using their social security number) but it makes running your business easier and will be necessary to do things like open a business credit card.²

5. Logistics

While the steps above are important, they are only the beginning. When learning how to start an online fabric company, there is much more to accomplish. The logistics you'll need to sort out before starting your wholesale business may vary based on the specifics of your business plan, location, budget, who you're doing business with, and what you want to provide. Among them include, but are not limited to:

• Selecting suppliers: In addition to large-scale manufacturers, you may also collaborate with independent artisans or import items from other countries. To choose your fabric suppliers, you'll need to consider speed, quality, and location in addition to pricing.
• Physical location: If you're just getting started, operating out of your garage may be sufficient. However, when your business expands, keep track of how much room you'll need and start looking for a site that can suit your needs. Inventory, machinery, and staff needs, such as a break room and facilities will most likely be included. You may wish to expand to another space in the future, as we'll describe below.
• Shipping: Cost, timeliness, and dependability are all important concerns, but there may be others, such as a company's customs background if you're delivering overseas or unique commodities.
• Hiring personnel: You'll need people to cover purchasing, sales, financing, and day-to-day warehouse operations. Consider hiring through trade shows or professional associations.²

6. Pricing

This is a big one, which needs to have a good balance. You want to be competitive, but you also want to make money. The fabric supplier that you have chosen will affect your pricing, on multiple levels. You need to mark up the wholesale price that you have bought your products at. One of the benefits of wholesale buying is that you often get discounts, usually based on the quantities that you buy. That being said, you also want to make sure that you’re offering quality goods.

7. Set up a website/online storefront

To run an online wholesale business, you will need a website or an online store. Through it, you can inform manufacturers that you are willing to do business with them. This way, they can contact you instead of you having to chase after them. Your website will also attract retailers who might be interested in selling your products. As mentioned at the start of the article, you can also start selling wholesale on Alibaba, which is often referred to as the world’s largest wholesale marketplace. Your product listings will receive greater traffic if you have a shop on an eCommerce website. Because the most prominent eCommerce marketplaces also serve as a search engine, your items will therefore be displayed to purchasers who are browsing for them.

8. Customer Service

Customer service truly matters. You're not only an online store when you start your wholesale business; you're also a service. People aren't simply purchasing a product from you; they are purchasing a promise that the product will come on time, as described, and will perform as intended. In a perfect world everything will go smoothly. But that's not always the case.

That said, with the correct supplier, courier service, and seamless planning, things will usually run well - at least most of the time. What you need to do is make sure that on the off-chance that it doesn't, you take care of your customers. Otherwise, there will be flooding, and the delivery will be halted, or your supplier is out of stock for a specific item and your customers will start to go elsewhere.⁴

9. Return policies

It’s a good idea to check out the policies of different manufacturers, including how they plan to handle any goods returned back to them due to defects or for any other reason for different cases. You will also need to check their after-sales service policies.

It is best to steer clear of any manufacturers that you cannot get a clear answer from – or you could end up with a lot of inventory that you just can’t sell. Inventory that you can’t move is simply wasted money.

10. Get easy-to-use inventory software

You should purchase a simple inventory control software package, which will help you keep track of your products, even if they are in more than one warehouse.³

This will help you in giving proper quotes and delivery schedules to your customers – thus helping you to earn more money by rotating your products in an efficient manner.

11. Keep a strict payment policy with your dealers

You should keep strict control over your finances – and also over your dealers, since the amounts involved could be quite large compared to if you were selling retail.

Whether you're just learning how to start a wholesale business, or you're looking to expand your existing operation, these tips should help you establish a solid base for your company.

Sell on Alibaba.com

Selling your items on a large B2B eCommerce platform is a good idea to help you establish, expand, or scale your small business. Alibaba.com is one of the world's most well-known B2B eCommerce platforms.

Around 14 million buyers from all over the world trust Alibaba. This indicates you can expect warm leads to come across your product listings on a frequent basis for your fabric store. When you list your products online, make sure that you use professional photos and videos to present the articles of fabrics. A robust online product offering is fundamental to drive ecommerce sales. Set up one storefront within the Alibaba.com marketplace to reach global buyers, and optimize product listings for maximum exposure.

Open a seller account to get a flying start to your wholesale online fabric store.