Weighing Up The Pros And Cons Of A Wholesale Dealer License Vs Retail

There are two main options available for people applying to become auto dealers. This article focuses on wholesale dealer license vs retail to help people understand which is the best option for them. People new to the industry are often confused and do not understand the pros and cons of the two options. Assistance is available when acquiring either type of license, however, it is essential to know the differences in order to understand what you are looking for.

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.

Wholesalers and retailers can buy from the same sources. They can both participate in auctions where cars are available at special and competitive rates. You get the chance to interact with different dealers and learn more about the industry. You can start business relationships that can help improve your investment later in the future.

The process of getting a license generally takes more than one week regardless of the type you are applying for. However, you can get a retail license in just 5 days by working with a company through a shared licensing program instead of making the application on your own. Although wholesalers usually have to wait for 4 to 6 weeks to get a license, they can get access to auctions in just a few days.

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.

The application process for either of the licenses is costly. There are more requirements involved when acquiring a wholesale permit. This often makes the process more costly than getting approved as a retailer. When getting assistance from a firm to speed up the process, you will notice the difference in price depending on the option you choose.

A wholesaler cannot become an auto broker. Auto brokers help customers find cars from other dealerships. They act as agents and their purpose is finding, negotiating and purchasing a car. These services are offered at an agreed fee as stated on the broker agreement. Only those in the retailing industry who can act as auto brokers for their customers.

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.