In Start Your Own Wholesale Distribution Business, the staff at Entrepreneur Press and writer Bridget McCrea explain how to start and run a successful wholesale distribution business. In this edited excerpt, the authors offer tips on finding loyal employees and how to decide what to pay them.
Once your wholesale distribution company gets up and running, you'll want to hire employees as it becomes necessary. How will you know when that is? Well, when your employees start wearing more than five hats, or when you realize that working 24 hours a day wouldn’t even help you get caught up, you'll know it’s time to hire help.
For starters, you’ll want someone who can manage customer relations. This person will handle inbound and outbound telephone calls to customers, as well as emails, texts, social media messages and letters to and from customers regarding issues, concerns and questions. Good candidates include recent college graduates and individuals who already have some sales experience. Seek out aggressive workers who can not only help boost company sales but also be sensitive to customer needs.
Next up on the hiring list will be someone who can run your company’s finance department. Their duties will include verifying customer credit, working with third-party organizations (leasing companies, for example) and handling other finance-related issues for the company. This person should have a financial background or credit management experience.
As you begin to delegate more responsibilities to your employees, you’ll also need to determine who's going to handle the purchasing function. When the time comes to hire someone specifically for purchasing, that person will find themselves working directly with your vendors to negotiate prices and delivery time frames. They'll also manage the inventory in your warehouse or distribution center.
Another consideration, which may or may not be necessary depending on where you’re located and how much of your business is done by referral, will be a marketing professional. This person should be experienced in the field and will be responsible for presenting your company to your customer base, vendors, media and trade groups in a positive fashion.
Once your front office is staffed, you’ll need to hire a few warehouse associates who'll physically take inventory off of the shelf, pack it in boxes and receive incoming inventory. They'll also operate the forklifts in the warehouse and handle other tasks as needed.
Depending on how your company is set up, you’ll probably need a warehouse manager as well. This person should have some warehouse experience and will spend most of their time worrying about control and efficiency and making sure workers are filling orders correctly. At Borvin Beverage, a wholesale wine distributorship in Alexandria, Virginia, for example, the warehouse manager ensures that the right wine is put into the right cases for the customer, that the trucks are loaded and that the delivery people are on time in delivering it.
How much you’ll have to pay
Pay rates for employees in the distribution field vary greatly by geographic area. As with any other type of business, for example, a warehouse in midtown Chicago will probably have to pay more for workers than would a warehouse located in a rural Iowa town.
On average, an office manager or assistant will demand $15 to $30 per hour, depending on experience. Professional positions (purchasing or marketing associates, for example) will command a starting yearly salary in the $30,000 to $40,000 range.
In general, warehouse workers command anywhere from minimum wage to $10 per hour to start. Pay rates for office personnel range from $10 to $17 per hour, depending on experience, and warehouse managers generally earn $30,000 per year and up, depending on their experience in the field.
Tips for finding employees
To get the right people on board, try the following tips for recruiting and retaining employees:
• Offer them enough money. If a truck driver comes to you for a job and if he was already making $25 per hour, then you know that offering him $18 per hour won’t work. Even if he does take the pay cut, he’ll only leave when something better comes along. The solution? Stick to hiring employees who've been making the same or less than what you’re willing to offer.
• Explore their potential. If you’re simply looking for an administrative assistant, then look for someone with the appropriate credentials to fill that need. If you want an assistant who can be groomed into a salesperson, however, then look for the credentials that will meet the position’s needs.
• Search outside your area. Try placing employment ads in newspapers outside your local area—preferably in an area with a higher unemployment rate, such as a city where a large plant may have recently shut down.
• Cultivate, cultivate, cultivate. Everyone wants to feel wanted, and that includes your employees. When you find a great employee, be sure to foster their professional and personal growth by allowing them to share ideas and truly be a part of your growing organization.
As a wholesale distributor, the primary obstacle to finding and keeping good employees in a warehouse atmosphere is that you’ll be competing with many other companies for the same skill sets. In other words, a warehouse worker would also make a good assembly line worker or auto detailer. The key is to choose carefully and to make your employees feel like they’re part of a team and not just another laborer. The same goes for your sales staff and administrative personnel. Such jobs are adaptable across a variety of industries, so be sure to treat employees well, make them feel they’re contributing to the overall success of the company, and listen to their needs.