Retailers Wholesale Product Sourcing Guide

Manufacturers & Wholesale Suppliers
The key to running a successful ecommerce store is having the right inventory that will attract the most buyers. In addition to figuring out what your customers want, you also need to be able to price your items competitively while maintaining high profit margins.

When acquiring inventory for an online store, you can choose to go to a manufacturer, distributor, or wholesale supplier, each of these product sources has its pros and cons. However, most new sellers find that wholesale suppliers can make getting started easier and more affordable. Most of the time, manufacturers sell to distributors, who in turn sell to wholesale suppliers, which in turn sell to retailers.

Sourcing products from manufacturers
Manufacturers are responsible for producing the products that you will eventually sell on your ecommerce store. If you can buy directly from the manufacturer, you can get the lowest price for the item you search for. After all, the fewer middlemen who take a slice of your revenue, the lower your costs and the higher your profit margins. This is especially true if you price your products competitively and drive a lot of traffic to your store.

Working with a manufacturer is very beneficial to your bottom line, but even though you can sometimes contract with a manufacturer to buy directly from them, you will often find that they prefer to produce large orders. They usually have exclusive arrangements with dealers.

It’s certainly a good idea to start with the actual source of your product, because you never know if you can make a deal that will give you the inventory you need at a great price. For branded products, it is advisable to go to the manufacturer and ask about their minimum order requirements. However, when you’re just starting out and your store and budget are still small, manufacturers may not sell directly to you.

Sourcing products from resellers
Sometimes you won’t be able to work directly with manufacturers because some manufacturers will only sell their products through established distribution channels and not directly to sellers or consumers.

In this case, all you have to do is ask the manufacturer to provide you with a list of their dealers and then contact those dealers to sign a contract with them. The advantage of going this route is that you’ll have access to the most reputable distributors, so you won’t waste time finding unreliable or poor-quality sources for your inventory.

Sourcing products from wholesalers
When you can’t have a direct relationship with a manufacturer or distributor, you may need to go through a wholesaler who can also get you the inventory you need at a low price.

Wholesalers will basically bridge the gap between the manufacturer and you (the customer). You can find wholesalers that cater to the specific niche you sell in, or you can find wholesalers who will provide you with a wide selection of products.

As opposed to buying items at retail prices and reselling them, most e-commerce store owners prefer to source wholesale products for their stores because they can buy items in bulk at discounted prices. When you don’t have to pay retail prices for your inventory, you’ll be able to increase your profits because you can still sell them at a competitive price while enjoying a decent profit on each sale.

Those just starting out will benefit from working with smaller wholesalers, but you should be prepared to pay higher prices until your inventory expands. As your online business grows, you’ll be able to switch to larger wholesalers, buy more inventory and enjoy lower prices

How to find the right wholesaler for your business
According to the U.S. Small Business Administration, there are approximately 300,000 wholesale distribution companies in the U.S. alone, so it’s best to take the time to research your options until you find a supplier that fits your needs and budget. If you want to see your inventory up close, you might want to attend an annual wholesale conference such as a gem show or gift show.

Many online sellers also want to source their products in China at the most affordable prices. You can find these suppliers by searching on B2B platforms like Shopvidi, Global Sources, and Alibaba. You’ll find thousands of suppliers, and you can filter your selection through certified and verified suppliers.

Here are some of the best ways to start your search for a wholesaler that perfectly matches your online store’s current needs:

When looking for wholesalers in a specific industry, a good starting point is the Internet. You can narrow your search based on the products you want to sell in your store, and you can also search for wholesalers who are willing to double as dropshipping suppliers. Whether you are looking for a local or international wholesaler, a simple internet search can yield results you can use.

Another option is to browse wholesale directories such as Wholesale Network or Wholesale Central. This step may help you find your ideal supplier in less time.

Reading trade magazines and focusing on classifieds and advertisements from wholesalers in your industry can also yield good results.

Consider attending some trade shows as they are a great place to find wholesalers who are looking for shopkeepers like you to buy their products. You can even close deals during the show. Otherwise, you can jot down some options for additional research later in your office.

If you plan to sell branded items in your store, contact the manufacturer of the product to ask if they sell wholesale, which may be just what you need to get the lowest price. If they don’t sell directly to you, you can ask them to refer you to one of the distributors or wholesalers who will work with you.

Beware of fake wholesalers
There are a lot of fake wholesalers out there who try their best to act as if they are legitimate suppliers. Therefore, you need to be aware of the risk of encountering wholesale middlemen during your internet search. These scammers may scam you out of money for your merchandise between your business and a genuine wholesaler. They will take your order after pricing your item and forward your order to the actual supplier. This means you are paying more than you should and your profit margins will be lower than they should be.

Some signs that a wholesaler is illegal include:
Wholesalers want to charge you a monthly or registration fee.
You won’t be asked for a sales tax ID.
The supplier’s website does not provide you with their full contact information.
You receive a claim about how much money you will be able to earn.
Wholesalers are trying to sell you extra services, or they’re offering you a deal that sounds too good to be true.

What to do after finding a wholesale distributor
Once you think you’ve found the right wholesaler for your business, your job isn’t over. To make sure you’re making the best decision, you can ask the wholesaler for references, and you can also do some additional research online to see if you can find reviews or complaints from other business owners they’ve worked with. Online forums for small business owners are also a great place to get advice from other online store owners. In these online communities, you can post your questions and hear from many different businesses around the world.

Also be sure to ask lots of questions to be absolutely sure you know exactly what you’re getting. For example, ask about order processing times, return policies, and quantity-based discounts. Order samples to see exactly what your customers will receive and make sure everything meets your quality standards.

Don’t be afraid to negotiate contract terms before signing. Details such as minimum order quantities, pricing terms and delivery schedules can be discussed if they are not suitable for you. Before signing, you can have your attorney review the contract to make sure you haven’t missed anything.

Dive into the international market
The great thing about selling online is that you can eventually expand into international markets. In the same way you can find local wholesalers, you can also find reliable and reputable drop shipping wholesalers from around the world to ensure timely fulfillment of any international orders.

Once you start selling, you can convert and transfer your profits directly to your local bank account with the help of Shopvidi’s online seller account. While online marketplaces may charge up to 3.9% to transfer your money from overseas, Shopvidi can help you save up to 75% on cross-border payments. *If you pay overseas suppliers, you can use our risk management tools to protect your business from currency fluctuations.

Be Smart When Working With Wholesalers
With the right strategy, you can more easily find the ideal supplier to source wholesale products at low prices. Working with multiple wholesalers will give you protection if one supplier raises prices or goes out of business. However, if you do work with multiple wholesalers, work with a supplier who can provide consistent quality to all customers, no matter what they order or where the product comes from. Ultimately, the goal will be to keep your business growing and having the right partnership with a wholesaler will set the stage for your success.

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