What is the criteria for being able to get components at wholesale prices?
I’m planning on doing this on a hobby basis for the foreseeable future until I can get my skills up. Obviously, I can’t get wholesale pricing if I buy the components for a bike that I ride, but if I build a bike for a friend and sell it to them for the cost of materials, can I get wholesale pricing?
Do you have to somehow prove that the components you are buying are going on a bike that someone else is buying? What prevents someone from buying the components wholesale and then just using them for themselves at a cheaper price?
Do you have to buy in bulk quantities? Even if you get a $1200 fork for $800 wholesale, if you have to buy 10 of them that’s a lot of money for forks that might be a couple years before they get onto a bike.
Do you go to a special website to buy the stuff wholesale that only certain people have access to?
Some of these things might seem obvious, but it’s not obvious as to how it works to someone on the “outside”.
I suggest you contact the company you wish to purchase from and ask them know if they have industry pricing or open wholesale accounts. They will give you the specs for discounting, if any. Also, check your local government’s resale guidelines and if you need a business license for a resales certificate.
In the UK you’ll need to be VAT-registered to get a business/wholesale account with most suppliers. This probably also means being registered with Companies House, having insurance, paying business-rate taxes etc.
Might be easier to make friends with a decent LBS and ask them for a discount in return for sending them service/repair work?
For suppliers in the UK, you shouldn’t need VAT or limited company status as far as I’m aware. For example, I’ve got trade accounts with Raleigh, MDI, Chicken Cycle Kit, Extra UK and Bitex as a small repair workshop operating out of my domestic garage/workshop. I’m not VAT registered or a Ltd. company - only a sole trader. They all wanted to know a bit about my business and how I operate to confirm I’m genuine but they were all satisfied with evidence of regular repairs on Instagram + a professional looking web site. I don’t think any of them even asked for evidence of business insurance. One or two asked for trade references but I had those so I don’t know if they’re a hard requirement or not.
The only company I’ve had trouble with so far is Madison who seem to require actual business premises. VAT and Ltd. company registration don’t appear to be factors, even for them, as I know a few other non-VAT registered sole trader mechanics locally who don’t have those things but do have commercial premises who’ve had accounts approved. I may try them again this year now that I have established trade with other companies.
Even without the Madison account, I can get pretty much any components from SRAM/Rockshox and Campag as well as some Shimano stuff plus a whole load of other brands.
For the OP, any wholesaler is likely to need some evidence of business activity. For a single build, it won’t be worth the effort as, as others have said, the prices you’ll be able to get initially and for small volume orders may still be more than you can buy at discount retail. I’ll still buy single items that way occasionally, at less than wholesale price, and then mark them up a bit.
A good relationship with a LBS can be huge. When I was starting out I approached one of the less corporate shops in my area and offered to guest wrench on weekends or events if they were ever short handed. In exchange I was given a small store credit per hour and access to cost +10% purchasing.
I’m going through the process of setting up dealer accounts right now and can hopefully help with this. I’ll separate the vendors I’ve reached out to in different tiers as far as ease of access goes. I’ll keep it updated as I progress through different suppliers.
Easy - these vendors required very little other than basic information to get started:
Medium - these vendors want some additional information like a reseller cert, FEIN, or business license:
Hard - these vendors need a certificate of insurance on file, run a full credit check, or want other more involved info:
In my experience you can avoid this by asking to pay by credit card (or etrans in Canada). This is how i am set up with Enve, fox/easton/raceface and a few other places. I’ve managed to not submit any banking/credit info to anyone yet.
I can second this! I used to run a retail department at a spa and most vendors (large or small) will welcome a credit card number instead of opening up a line of credit for payment. Smaller vendors especially.
Yep. I’m COD on all my suppliers here in Australia. Everyone but Shimano has opened a COD account for me. Though, I am able to order bits and pices from my contact at Shimano and told recently they will sell me single groupsets when needed. So starting to get some traction with them.