Advantages And Disadvantages Of Wholesale Dealer License Vs Retail

One of the most important step when setting up a business in the auto industry is acquiring a license. Wholesale dealer license vs retail has been the most common discussion and has put many people in a dilemma. It is important to understand both options before making the decision to choose one or the other. The following are a few factors and comparisons on the two options.

These two options mainly differ in terms of where you can sell your cars. You can get into the industry to sell vehicles to the general public or other sellers. As a retailer, you are permitted to display and sell your automobiles to the public. Wholesaling involves selling cars to other sellers at a reasonable price so that they can resell them. This is done by participating in dealer-only auctions which are not open to the general public.

With either type of license, you have access to different auctions available within your area. These are dealer-only auctions that offer special rates as well as other attractive features. They also provide a great platform where you can interact with other firms and exchange ideas on business growth. You can make important business connections with those selling similar automobiles.

Another important factor to consider when comparing these two options is the time taken to acquire the permit. For retailers, it takes just a few weeks while wholesalers may have to wait for more than four weeks. However, there are companies that speed up the application process at a fee. It is important to hire such a company since the process can be difficult. Additionally, you can look for a company to work with through a shared licensing program.

When getting into the industry, one factor most people consider is the profitability of their business. Selling to the public generally brings in more profit compared to selling to other dealerships. This is because the public is not looking to resell the cars for a profit. For wholesalers, they have to be well-connected in the industry in order to make a good profit. They have to have good ties with dealerships and financial institutions.

There is not much difference when it comes to costs of getting either of these licenses. A shared licensing program makes the process easier and cuts down costs when you want to get into retailing. There are more requirements to meet when looking to be approved for automobile wholesaling. This accounts for the difference in price when a firm is assisting you through the process.

With a retail license, you can act as an auto broker for your customers. There are customers who might be in need of a car that is not available in your shop. Since most of them are busy, you can agree to find them their desired vehicle and negotiate a better deal from another dealer. These services are offered at a flat fee which is stated in the broker agreement.

The above-discussed points explain the similarities and differences between the two licenses. Understanding these factors is essential in determining which is the most suitable option for you. It is advisable to get assistance from a firm in order to make the application easier.