5 Steps to Finding a Quality Wholesale Product Supplier
A Quality Supplier Can Increase Your Profits and Minimize Headaches
Finding a quality wholesale supplier for your business is essential to your success. If you have a great relationship with your supplier, you can potentially secure better payment terms, giving you much-needed flexibility in your business. On the other hand, an unreliable supplier may leave your shelves empty and your customers to your competitor’s store. So how do you find a great wholesale supplier?
The following are five steps to finding and keeping a great wholesale supplier for your product business.
Choose Your Product
The first step toward finding a great supplier is to ensure that you have chosen the right product for your wholesale product business. Knowing your market first before investing in inventory or selecting a wholesaler will save you a tremendous amount of time, money and headache. A few questions to think about when choosing your product include:
- Do you know your customer’s tastes and interests?
- Are certain features important to them?
- Will your customers need special financing?
- Are your potential customer’s individuals or companies?
- Do your customers prefer to buy products online or at a store front?
Determine Your Supplier Type
Once you’ve chosen the type of product that you are going to buy for your product business, it is now time to determine which type of supplier you will need to get started.
The following descriptions of different supplier types can help you decide:
- Manufacturers: Some manufacturers will sell products directly to you. Manufacturers tend to request high minimum orders or ordering in bulk. If you are prepared to buy direct, then this is a fantastic option, as you can save money over the long-term. However, if large bulk orders concern you, you might be better off purchasing from middlemen until you’re prepared to purchase in bulk.
- Distributors: These middlemen are typically the businesses many brick-and-mortar and even online stores purchase from. They buy in bulk and resell the products in smaller quantities to local stores.
- Foreign Companies, Importers/Import Agents: Don’t limit yourself; consider sourcing your products internationally. Many import companies are prepared to help you find some incredible deals abroad and act as a domestic distributor for offshore firms. However, if you do your due diligence and are prepared to handle import details, you may want to bypass import houses and deal directly with foreign manufacturers yourself.
- Drop Shippers: Although many Drop Shippers function like Distributors, buying in volume and reselling individually, the key difference is they ship products directly to your customer’s door. This is especially important for specialty shops and online businesses who may not have the resources to store products locally.
As your business grows and you sell higher volumes, you’ll be able to move up the supply chain and secure better prices and more favorable payment terms.
Find the Right Supplier
Although there are thousands of suppliers, choosing one appropriate for your business will be much easier once you know exactly which product you want to buy and which type of supplier you need to buy from.
The next step is to comb through the different resources to find one.
- Trade Shows: One of the best places to find quality whole suppliers is at a trade show. You’ll have the opportunity to see which suppliers take their market seriously, glean great information from the one-on-one conversation with the sales representative, gain insight into the company and be able to instantly compare a variety of competitors.
- Trade Publications: Magazines specific to your industry or market are another great source of potential suppliers. Although you can’t judge a company by its ad, you can learn a lot from their marketing messaging and can gain some insights on certain companies in the publication’s articles.
- Peers: Other people in the trade may be willing to steer you towards great suppliers. You can start by attending trade shows or contacting other non-competing businesses similar to yours. Online forums are another place to swap stories, ideas, and experiences.
- Search Online: Most quality wholesale suppliers will have a good website and make it easy to find. However, you can also go through sites such as NREL, Alibaba, goWholesale or Wholesale Central.
When evaluating potential suppliers, make sure you do your homework! Ask for references, get opinions from your peers, search for reviews online and contact organizations such as the Better Business Bureau or an appropriate Chamber of Commerce.
Negotiate Great Terms
Once you’ve picked your supplier, make sure you understand the terms of the agreement (and don’t be afraid to negotiate better terms). Quality wholesale suppliers want great relationships, so if the one you’re dealing with doesn’t have time for your questions or concerns, you may need to keep shopping around.
What are the shipment terms? Do you have to pay for shipping or do they? What are the payment terms? How much credit are they willing to extend? How quick can they ship the product? Do they offer expedited shipping if you sell out of your products?
Go through a few what-if scenarios and see what terms are applicable in that situation. You don’t want to wait until an emergency happens to find out.
Build Long Term Business Relationships
Developing a good rapport with your supplier is a key ingredient to securing a quality wholesale product supplier. The better history you have with them and the more loyal they see that you are, the more leverage you will have. You may be able to secure more favorable terms, negotiate flexible payment schedules, have input in future product development or receive preferential treatment.