If you run a retail shop, regardless of whether it's an online shop or a brick-and-mortar store, you know how important finding the right wholesale suppliers are. Your wholesale supplier can make or break you. Read on to discover 11 tips for choosing the ideal wholesale provider for your individual situation.
What is a Wholesale Supplier?
A wholesale supplier is a Business-to-Business company that sells large quantities of products at a discount rate. Some wholesalers manufacture the merchandise they sell and therefore are able to sell their wares at deeply discounted rates.
Other wholesalers, however, are just at the top of the supply chain as wholesale suppliers because they buy in extra high volume or are wholesale distributors who are the go-betweens.
Wholesale Distributors vs. Wholesale Suppliers
Wholesale distributors and wholesale suppliers are both key players in wholesale business dealings, but the roles they play are different.
A wholesale distributor has a personal relationship with big wholesalers and with retailers who sell products. They are, in essence, going between sources who get the best deal on a product and then sell it for a slightly higher price to retailers or who may be paid by the wholesaler.
Most wholesalers employ representatives to ensure product quality and solicit customers.
Running a Retail Business
It's wise to know what you're doing when operating a small business that buys and sells. Both brick-and-mortar shops and online stores must have distribution channels that offer what it takes to optimize business.
In order to increase your profit margins, you'll need to narrow down potential suppliers who you can buy products cheaply from and sell at higher prices. to other retailers and/or customers.
Tips for Choosing the Right Wholesale Supplier
To find wholesale suppliers who are the best fit for your physical shop or online business, here are some helpful suggestions:
- Check out multiple wholesale businesses. Don't limit yourself. Not only will you want to look into more than one wholesale supplier, but you might also consider doing business with a number of sources.
By comparing wholesalers, you'll be able to negotiate oftentimes.
- Customer service must be stellar. Never forget that you have options, and that includes wholesalers. Don't settle for less than getting great customer service.
When dealing with manufacturers or distributors, you should always be treated with respect. If not, take your business elsewhere.
- Don't leave out global sources. When checking out manufacturers, remember to check the international industry manufacturers available. Take into consideration any extra fees, like shipping costs and time constraints but if the deal still pans out in your favor, go for it.
Foreign suppliers are often able to offer lower prices. They often have excellent customer service too, because they value your business.
- Shop local. Local business directories are typically full of wholesale supplier names and contact information. You can search the particular industry you retail in to find wholesale products close to home.
You will usually save a ton in shipping fees when you do business locally.
- Where are other stores and other businesses shopping? Ask around and find out where the best wholesaler businesses are.
If fellow business owners have a long-term relationship with a manufacturer or distributor within the industry you are selling in, see if they will put in a good word for you.
- Working with a wholesaler. You want a wholesaler in your industry who will work with you. If you aren't set up for buying in extremely large amounts, talk to the manufacturer.
Ask if you are able to buy in smaller quantities if you need to do so in order to start out. As your business grows, you can expand to dealing with more wholesalers and move on to buying more at one time.
- Dig in. Get online and research all you can about everything relevant that you can find. You can never know too much about the wholesale-resale subject matter.
Some online businesses use drop ship options which is a service provided by some wholesalers that ship the goods directly to the retailer's customer.
While drop ship does typically cost more since the manufacturer or wholesaler is doing the shipping, it is quite convenient and helps retailers keep up with online business customer demand as far as shipping time goes.
Trade Show Wholesale Opportunities
Trade shows are like wholesale central - presenting opportunities for networking among retailers and wholesalers.
When you are in the buyer zone, you can choose a wholesaler who sells goods in person.
Another huge advantage is you are able to directly see the merchandise.
Another benefit of a trade show is that sometimes you can purchase in bulk on the spot without having to worry about shipping costs.
Trade magazines are an excellent source of finding a wholesaler or multiple wholesalers to do business with. Both direct wholesalers and manufacturers often participate in listing their services in publications.
Another great avenue to find a wholesaler is to join a trade association. Groups are comprised of those who sell in bulk, like wholesale outfits and manufacturers, and those who sell retail, such as owners of e-commerce stores.
Some trade groups go through their local chamber of commerce, so it's a good idea to check with your town or city if you are looking for a wholesaler.
Finding a local wholesaler or manufacturer may save you from having to pay to ship if you are able to pick up the goods directly.
You are NOT Obligated
You are never obligated to continue doing business with a wholesaler or manufacturer. If you are unsatisfied with the service or the products, you have the right to back out.
Memberships and Membership Fees
Some wholesale outfits require you to join in order to shop in bulk and avoid sales taxes. There is often a membership fee tacked on. Sam's Wholesale and Costco are examples of such places. Do the math, and if you still come out ahead, despite the fee, don't hesitate to join.
Keep Careful Records of Purchase Prices
It's not unusual for wholesalers to raise the prices of their goods from time to time. Most will notify you when they do, but that's not always the case. Keep track of the cost of each item you purchase to see if anything goes up.
If prices do go up, you have the choice of attempting to find another provider to buy from, or you can raise your price to cover the cost.
If you are thinking of changing wholesalers, you might try negotiating with your original one before switching. Often times they are willing to give you the lower price back or to offer another kind of incentive such as free shipping.
The relationship between a wholesaler and retailer is a sensitive one. Both must make their profits in order to survive in the business world. That isn't to say, though, that there shouldn't be compromises because there has to be a meeting point.
Glean From Other Business Owners
When you get a chance to communicate with other business owners that you meet at trade shows, within an association, or wherever you may run into them, be sure to do so.
Learn from those who have gone before you. You are likely to find a plethora of valuable information.
Don't Give Up
Retail can be challenging. You must be able to work with your customers and wholesalers too.
The main thing to remember is no matter what, just keep plugging away. You will find the ideal wholesale situation in due time.
Wholesale Business Matters
Don't forget that wholesale allows you to purchase items tax-free. But in turn, you'll collect sales taxes when you sell to your customers.
Keep good records so you can accurately pay the taxes that are due from your sales.
Bookkeeping is a Must
If you need to hire a bookkeeper in order to ensure you handle taxes properly, do so. It's much better than the option.
A bookkeeper is valuable in many other ways, such as helping decipher what deductions you can take at tax time. So, hiring one might be the best option ever.
The Importance of Finding the Best Wholesaler
When you sell to customers, you must find a great wholesaler because you can't afford to pay too much for your merchandise or for shipping.
You owe it to your own customers to get the best deal so you can give the best bargain in return.
Finding a wholesaler who can deliver with timely delivery is imperative too. If you don't get the goods on time, you'll have trouble shipping them to your customers on time.
Know Before You Go
Doing your homework prior to checking out potential wholesalers is imperative. Many wholesalers are helpful when you don't know exactly what you are looking for, but others tend to take advantage of those who are new to the wholesale scene.
With due diligence, you'll find a trustworthy "go-to" wholesaler who offers great prices. Then you know...you're in business.