How does a small business organize an uninterrupted supply of products? How to save money and time when purchasing goods for your retail store? You need an honest and trustworthy wholesale distributor to work with. Let’s take a close look at how to find one.
- What is a wholesale distributor?
- Why work with a wholesaler?
- Find a reliable wholesale supplier in 5 easy steps
- Risks of working with wholesale suppliers
- Final words
What is a wholesale distributor?
Go to your local supermarket, take any product from the shelf, and you’ll see that it has come a long way to reach you. From the manufacturer, the product was shipped to the wholesale distributor, and then to the retail distributor, i.e. your local supermarket.
- Manufacturer is responsible for manufacturing the product. The manufacturing company doesn’t deal with marketing, negotiations, and other sales-related issues.
- Wholesale distributors purchase the product from the manufacturer in large batches and at low prices and then sell them with a margin to retailer distributors.
- Retailers add their own margin to the product price and sell the product to the end buyer online or offline. Some retail distributors also act as dropshippers, i.e. they pack and ship goods to end customers. This way, as the product is moving up the supply chain, its price is growing.
For a better understanding, we’ve put together a quick FAQ about wholesale distributors.
Do I have to look for a wholesaler? Why can’t I buy directly from the manufacturer?
Manufacturers prefer to work with large buyers. It’s easier to close a deal with one large buyer than multiple deals with small buyers. Plus, even if the manufacturer agrees to sell to you directly, the price will probably be higher for you than for wholesale distributors. You need to compare the prices and other terms in each individual case.
When can I do without a wholesale supplier?
You don’t need a distributor if you manufacture the products yourself or buy directly from the manufacturer.
Why work with a wholesaler?
Whether you’re running a business online or offline, the role of distributors in optimizing the whole supply process can’t be denied.
- You save time. Instead of negotiating with dozens of individual manufacturers, you can make a deal with a single wholesale distributor.
- You get access to a wider product range. There is a big number of products that small businesses can’t buy directly from manufacturers, especially large ones. These goods are only available through distributors. Plus, you can buy imported goods from the manufacturer’s official dealers in your country. This way, you’re no longer limited by geography.
- You save money. Since wholesale dealers buy products at low prices, they can offer attractive prices for retailers as well.
Find a reliable wholesale supplier in 5 easy steps
Finding a good supplier is a challenging task that takes a great deal of time and patience. Follow the steps below to find the right wholesale supplier for your small business.
1. Study supply channels in your industry
Los canales de suministro están determinados por el nicho de su negocio, la ubicación geográfica y las especificaciones del producto. Un producto puede llegar de un fabricante a un minorista de diferentes formas. Por ejemplo, algunos proveedores mayoristas tienen el derecho exclusivo de importar un determinado producto a un determinado país. Esto es lo que necesita averiguar:
- in what countries the manufacturers you’re willing to buy from are located;
- how their products find a way to your country;
- how many links the product supply chain consists of.
2. Start searching
To reduce costs, you need to keep the number of intermediaries between you and the manufacturer to a minimum. Start your search with contacting the manufacturer. Find out if they are willing to sell to you directly. If not, ask for a list of official distributors they’re working with.
Also, you can try other ways to search for suppliers.
- Search suppliers by keywords online. Search for the product names, niches or trademarks, plus the word “wholesale supplier”/”distributor”.
- Go to major B2B ecommerce platforms (Alibaba, WholesaleCentral, GlobalSources) and platforms for finding trustworthy supplies (SaleHoo, WorldwideBrands).
- Start networking. Join industry-related groups on social media and online forums. Go to exhibitions and other events. All these are potentially valuable sources of information that will help you find the best suppliers.
3. Gather information
At the end of your search, you need to have a list of potential suppliers. Now you need to contact the suppliers one after another and gather information on each of them:
- minimum order amount;
- price per unit;
- geographic regions they supply to;
- payment methods;
- shipping terms and times;
- return policy for damaged goods and procedure for other faulty situations;
- price changes (find out how long the current prices are valid for; if the dealer notifies buyers of upcoming price increases, etc.);
- changing conditions (find out if the supplier notifies buyers of production termination and other changes).
4. Make a choice
At this step, you need to end up with a shortlist of suppliers that suit you best. Summarize the information that you’ve gathered in a table: company name, contact information, and terms (prices, shipping times, etc.). This way, you’ll be able to easily compare different suppliers against each other and pick the best options (or options).
Keep in mind that you don’t have to make the final decision right away. Give yourself time. Make a test order to see how you like working with the supplier. If things go wrong, you can always switch to another dealer.
5. Create a brand identity
Wholesale suppliers only work with registered businesses. This means you’ll need to come up with a name for your company, as well as create a logo and other brand identity elements. With the ZenBusiness brand identity constructor, you can get all this (and more) in one place, fast and easy!
Use ZenBusiness to get a business name, logo, custom business cards, letterheads, social media images, and other designs that are vital to any company.
Risks of working with wholesale suppliers
Your sales can be affected by plenty of factors. The more links a supply chain has, the more risks you as a retail vendor are exposed to.
- Tough terms. Wholesale suppliers have the freedom to choose what manufacturers to work with and what terms to offer to retail sellers. For example, they can determine a fixed order amount or sign agreements for very limited periods of time.
- Market fluctuations. Wholesalers act as a go-between between you and the manufacturer, making it impossible for you to control the situation. Your business will be exposed to the constantly changing market conditions, such as product availability, market demand, price fluctuations, and others.
- Imported goods. Some wholesalers don’t ship internationally or may terminate their supply agreements following changes in the legislation or due to other reasons.
While you can’t fully avoid risks, it’s in your power to minimize them.
- Take the time to make a thorough check of the supplier’s reputation and terms before you sign a deal.
- Keep a few alternatives up your sleeve in case you want to change the distributor you’re currently working with.
While searching for the right wholesale supplier may take a decent amount of time, your efforts will pay off eventually. With an integral and reliable supplier, you’ll have access to high-quality goods on beneficial terms. We hope that this guide will help you navigate the challenging world of wholesale suppliers. Be sure to double check the information and follow the guidelines we’ve outlined for you.