Wondering how to start a dairy products wholesale and manufacturers business? We take you step-by-step from start to success.
The Advantages of Dairy Production & Wholesaling
U.S. dairy farmers produce more than 20 billion gallons of milk per year, supplying the raw materials for cheese, butter, ice cream and other products that are distributed to consumers throughout the nation and around the world.
Although most raw milk is sent to milk processing plants, a growing number of dairy producers are transforming their milk into consumer grade products and distributing them wholesale to retailers. From a revenue perspective, a producer-wholesaler model allows front line dairy owners to capture a larger share of industry profits. But it also creates opportunities for dairy producers to take advantage of unique market categories.
For example, a producer-wholesaler could build a brand around organic dairy products. Rather than selling their milk to organic processors, the farmer could create a unique product line, distribute products to regional or national retailers, and reap the long-term equity benefit of a recognized label.
Before you leap, you should know that a combination producer-wholesaler startup isn't easy. In addition to processing your own milk, you will need to market your products to retailers, handle shipping and logistics, and perform many other functions that are well beyond the purview of traditional dairy producers.
How to Become a Dairy Producer-Wholesaler
Becoming a dairy producer-wholesaler can be an entrepreneurial challenge. But if you can pull it off, the potential for higher profits and long-term brand equity could be yours for the taking. Here are a few tips to help you launch your dairy wholesale and manufacturing startup on solid footing.
- Product Lines. Most small- to medium-sized producer-wholesalers specialize in creating a single category of products. For instance, some producers-wholesalers focus on transforming their milk into ice cream desserts; others specialize on cheese or cream or yogurt. So before you go too far down the road toward a wholesale business model, you'll want to perform ample market research to identify a product specialty.
- Processing Requirements. Commercial milk processors make large-scale pasteurization look easy. But as a producer-wholesaler, you will either need to pasteurize your own milk or outsource it to a professional processor. Either way, you will need to address pasteurization and other processing requirements (as well as FDA guidelines) with the goal of creating a cost-effective milk processing system.
- Distribution Channels. Don't assume that retailers will welcome your end products with open arms. When you are creating your business plan, you will need to contact several retailers to feel out the demand for your product line. Armed with samples and tentative pricing plans, you should be able to quickly determine whether your products have any real appeal in the marketplace.
Writing Tips for a Dairy Products Wholesale & Manufacturers Company Business Plan
Like it or not, your new dairy products wholesale and manufacturers business is going nowhere fast without a business plan.
But here's the good news: With a few tips, any entrepreneur can create a successful plan for their business. If you can get past the mystique, you'll see that a business plan just describes where your dairy products wholesale and manufacturers business is headed and how you intend to get there.
Although there are many uses for a business plan, it's most important function is to guide your decision making and strategic planning.
Before you begin, we recommend reviewing a few sample business plans.
Don't Ignore the Competition
Well in advance of opening a dairy products wholesale and manufacturers business within your community, it's worthwhile to find out how many competitors you have. Use the link below to get a list of local competitors in your city. Simply enter your city, state and zip code to get a list of dairy products wholesale and manufacturers businesses in your town.
If there's too much competition, it may be wise to consider starting the business in a less competitive marketplace.
Finding a Non-Competitive Business Mentor
After you've evaluated your local competitors, it's essential that you learn as much as you can from somebody who is already in the business. It's very unlikely that the local competition will talk to you. The last thing they want to do is help you to be a better competitor.
However, an entrepreneur who owns a dairy products wholesale and manufacturers business outside of your community will be much more likely to talk with you, after they realize you reside far away from them and won't be stealing their local customers. In fact, they are often very willing to share startup advice with you. If you are persistent, you can find a business mentor who is willing to help you out.
Do you know how to find a dairy products wholesale and manufacturers business owner that lives outside of your area?
No problem! Just use the link below and try a random city/state or zipcode. Then start dialing for advice until you are successful.
Purchasing a Dairy Products Wholesale & Manufacturers Business
Many experts advise against starting a dairy products wholesale and manufacturers business if you can buy an established operation. Yet the process of buying a dairy products wholesale and manufacturers business introduces a new set of challenges.
As you would expect, there are a number of steps in buying a business. For most prospective business buyers, the first step is to contact a business broker.
Although you could buy a dairy products wholesale and manufacturers business on your own, you'll save time and money by recruiting a reputable broker with industry experience.
Explore Franchising Options
The odds of achieving your primary goal of doing well with your venture are higher if you decide to franchise instead of doing it all on your own.
Prior to starting a dairy products wholesale and manufacturers business, it's worthwhile to assess whether franchising might help you on your entrepreneurial journey.
The link below gives you access to our franchise directory so you can see if there's a franchise opportunity for you. You might even find something that points you in a completely different direction.
These additional resources regarding starting a business may be of interest to you.
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