The internet is filled with scammers.
You know not to open that email from your “friend” who needs to borrow a few hundred dollars. You know that you're not really the 1 millionth visitor to a website, and even if you are, it does not mean that you'll get that free laptop.
Scammers have infiltrated the eCommerce industry too. And they've made the process of looking for reputable wholesale suppliers quite tricky.
If you’re not making your own products or selling things that can be found on an online or retail store, the million dollar question is: How do you find credible wholesale suppliers who have profitable inventory that you can resell online?
The answers to that question are below.
But let's first begin with:
Who Exactly is a Wholesaler or Wholesale Supplier?
Entrepreneur.com offers the best definition of wholesale suppliers and how they work. It also provides a comprehensive guide to buying from wholesale suppliers.
According to Entrepreneur:
Wholesale suppliers operate in a service industry consisting of warehouses, sales forces, support and logistics offices, merchandising teams, delivery mechanisms and much more. The wholesale industry is the infrastructure that bridges the gap between the manufacturer (who makes very large numbers of products) and the retailer (who sells the product one unit at a time to the end consumer).
If you are new to product sourcing, this is a great article to learn from because it teaches you how wholesaler suppliers function and explains the different types of wholesaler sources.
What Types Of Wholesalers Are There?
Reseller Network lists seven different types of wholesalers.
The seven types are Merchant, General, Specialty, Specific Product, Discount, Drop Ship, and Online Wholesalers.
Various suppliers will sell and ship differently, so it’s important to know the types of wholesalers available so that you can narrow your search to the type of wholesaler that will work best for you.
Finding Wholesale Suppliers
Chron.com offers tips on finding wholesalers, along with a list of reliable websites you can use to find them.
The most important thing for you to know when looking for an online wholesaler is how to ask the right questions. The article suggests questions like:
“Does this wholesaler sell replacement parts for my type of product?”
“What is the minimum order?”
“How does this unit cost compare to other wholesalers?”
“What is the wholesaler’s turnaround time for orders?”
“What is their return or damaged merchandise policy?”
“Has any business complained about the practices of this wholesaler?”
“Is this an actual wholesaler, or a middleman?”
Gathering as much information as you can from potential sources will allow you to compare your various options. You want to get the biggest return from your buying dollars, so spending time diligently finding profitable product sources is a necessary time investment.
In the video above, Sam Dey from Deytips talks about where to find sources for wholesalers and the importance of doing product research within your niche.
If you have a specific type of product or market you are selling in it’s a good idea to follow blogs, websites or videos from other people within your industry. He also discusses the importance of slowly building trust with wholesalers and buying small amounts of product first so that your risk is lower.
What About Buying Overseas?
Steve Chou from MyWifeQuitHerJob.com promotes the idea of buying wholesale overseas. According to his research,
Buying direct from the manufacturer or from overseas vendors is the best way to obtain the lowest prices, but it also presents the greatest upfront headaches.
There are pros and cons to every type of wholesale supplier. Buying from overseas wholesalers can be a way to increase your profits, but it may not be the best fit for beginners because it is can be a difficult venture to engage in.
Product and Supplier Research
The U.S. Small Business Administration is a great site for basic information about what wholesalers are, how they work, and how to research them.
According to them:
There are currently 300,000 companies in the U.S. wholesale distribution industry, so as you can imagine, finding and forming trusted relationships with wholesalers takes time and research.
You’ll want to spend plenty of time researching the company’s history and learning about how they do business. They also direct you to the Better Business Bureau where you can research on more businesses you can consider working with.
Worldwidebrands.com made twenty helpful videos containing tips about working with online wholesalers. These tips cover legal issues, calculating profit, and how to work with wholesalers. The wholesale tips, topics, and questions they address are:
- Get legal or get cheated.
- Some wholesalers don’t want to work with online sellers.
- Hide your wholesale supplier from competition.
- Wholesale prices are not public information.
- Wholesale prices lower when you buy more products.
- Some wholesalers charge refundable deposits.
- Be patient when setting up an account with a wholesale supplier.
- Your retail price minus your wholesale price does not equal your profit margin.
- Some wholesalers have their own retail stores – and that’s okay.
- Drop Shipping is a low cost, low risk way to start selling online.
- What is the manufacturer’s advertised price?
- What is the MSRP?
- What is the minimum order quantity?
- What is quantity on hand?
- What is Free On Board?
- What is Net 30?
- What is Return Authorization?
- What is a Stock Keeping Unit?
- What is Buying at Cost?
- What are Trade References?
These helpful video's provide quick tips and answers to these common questions sellers have when getting started with wholesaling.
Take precaution when it comes to researching wholesale sources. But also know that there are plenty of reliable and credible online sources from which to locate wholesale suppliers.
You don’t have to be scared of scammers. Knowing how to keep a keen eye out for them will give you confidence during your search.
Let's Discuss: What has been your most effective way to find reliable wholesale sources online? Share it in the comments.