How you choose to supply your store is one of the most critical decisions you make as an ecommerce merchant. For many, working with a wholesale vendor provides them with an opportunity to diversify and increase their inventory.
Whether you are starting a dropshipping, warehousing, or a third-party fulfillment store, the type of suppliers you choose to work with will play a key role in determining the success of your business. Therefore, it is important that you find the best wholesale vendors who offer great prices, deliver on time, and provide reliable customer services.
In this article, we'll help you understand the different types of wholesale suppliers, the benefits and drawbacks of wholesale vendors, the best places to find them, and how to buy from them.
What is a Wholesale vendor?
A wholesale vendor is a business that buys products from manufacturers in bulk and sells them to other retail businesses. They play a key role in bridging the gap between manufacturers and small business owners. Instead of operating a store, they focus on supplying retailers with merchandise so that they can sell to final customers.
The Different Types of Wholesale Suppliers
To find the reputable wholesale vendors in your niche, you need to understand your industry's distribution channels. This is because there are many players involved in the wholesale process, with different wholesalers serving different markets.
That means a product can follow different distribution channels when going from the manufacturer to the retailer. Here are the different types of wholesalers you need to be aware of:
- Manufacturer: Sometimes, you may choose to source your products directly from the manufacturer. This happens when dealing with small or one person manufacturers. In this case, your manufacturer is your wholesale vendor.
- Importer/Exclusive Distributor: This is a company that has the sole right to import and distribute a product in a certain country. The company may sell directly to retail stores or distribute the product to other smaller local wholesale vendors who in turn sell to retailers.
- Wholesaler/Regional Distributor: These are regional wholesalers. They source for boxcar-sized lots and then deliver to local wholesalers who then sell to retail stores.
- Jobbers: These are individual wholesalers who make daily supplies to local grocers and retail stores.
Benefits & Drawbacks of Wholesale Vendors
Traditionally, wholesale vendors only work with brick-and-mortar stores. But with the acceleration of eCommerce, there has been a rise of small business wholesale suppliers that work with eCommerce retailers.
Here, we look at the benefits and drawbacks of wholesale vendors to SMEs in the eCommerce space.
- Consistent supply to products: Wholesale vendors purchase products in bulk from manufacturers. They are therefore well-positioned to provide a reliable and steady supply of products to store owners at discounted prices.
- Navigating minimum order quantities and customs: Small businesses find it hard to purchase products directly from manufacturers due to minimum order requirements. Wholesale vendors help SMEs to navigate these requirements by purchasing goods in large quantities from suppliers and then selling to them in smaller quantities.
- Better prices: Wholesale vendors purchase products in bulk from the suppliers. They, therefore, qualify for better prices and discounts. They then pass these benefits to retailers by availing goods to them at discounted prices.
- Geographical access to products: With a wholesaler, you are not restricted to local suppliers, hence you can access a wider range of products to choose from. In case you want to expand your business, you will find a wide range of new products to help you meet these goals.
- Quality control: Reliable wholesale vendors do quality check before importing their products. You are sure to get high-quality products without having to do a lot of quality checks yourself since this has already been done for you. All you need to do is track how their products are performing with customers. You can always switch to a different supplier if their items get too many negative reviews.
- Most wholesalers are reluctant to work with eCommerce retailers: Since wholesaling is fairly new to the eCommerce industry, many wholesale vendors are skeptical of working with eCommerce businesses. They prefer working with traditional brick-and-mortar retailers who have been around for years.
- Not all wholesale suppliers are reliable: Finding reliable wholesale vendors can be difficult. That means you will have to go through use a trial and error process to find high-quality wholesalers you can trust.
- The difference in business model: Many traditional wholesalers find it hard to fit eCommerce into their business model. For example, online merchants may want distributors to dropship on their behalf, but most wholesale suppliers shy away from this eCommerce business model because it doesn't fit their business model.
How to Find Wholesale Vendors
To find the best wholesale vendors to work with, you first need to figure out how you want to fulfill your orders. Do you need them to dropship directly to your customers, or do you want to do self-fulfillment? You also have the most popular option of going with a third-party fulfillment company.
Deciding your fulfillment process is important because it will help you weed out wholesale suppliers who don't offer the type of fulfillment you are seeking.
Here are some things you need to consider when deciding whether a wholesale provider is right for your business:
- Product offerings: You need to check whether the supplier offers products in your niche.
- Price: Shop around and compare prices from different wholesalers. Working with wholesalers who offer great prices will give your business a competitive advantage in the market.
- Reliable shipping: Late deliveries can cost you a lot of business. Shipping costs are also another thing to consider. Look for wholesalers who offer reliable shipping services such as tracking, automated shipping alerts, and guarantee timely delivery. Easyship can help you streamline your B2B shipping.
- Customer Service: You need to work with a wholesaler who will be there when you need them.
Here is how to find wholesale providers for your business:
- Do an online search: A great way to find wholesale suppliers is via online search via Google or through major B2B marketplaces such as GlobalSources.Com or Alibaba.
- Use the US customs database: You can leverage the Jungle Scout supplier database to spy on your Competitors' suppliers. This database documents all the shipments imported into the US by different companies. Information in this database is freely available and you can browse different shipments to see the suppliers your competitors are using.
- Attending trade shows: Attending major trade shows like Global Sources Expo or Canton Fair in Hong Kong and China is a great way to meet different manufacturers and suppliers, see their sample products, and establish business relationships with them.
- Subscribe to Your Industry's Trade Publication: You can find names of small business wholesale vendors or small manufacturers in a trade magazine or an online newsletter that provides daily or weekly industry news and updates.
- Join Industry groups and forums: You can get valuable information about wholesale vendors from experienced eCommerce retailers in a group or online forums.
- Professional networks: Joining your local Chamber of Commerce or other small business networking groups is also a good way to build professional business connections that can help you find reliable wholesale vendors.
How to Contact a Vendor
Once you have found some potential suppliers through any of the above-mentioned ways, you need to follow a strategic line of communication to find the best ones.
Here is what you should do:
- Send them an email or give them a call: The first thing you need to do is send them an email or give them a call right away. Here, the aim is to narrow them down and remain with the most promising ones.
- Have a WeChat or Skype Conversation: After narrowing down your list of suppliers, go ahead and have a WeChat or Skype conversation with the most potential ones.
- Visit them directly: If you want to put a more serious note on your search for reputable suppliers, you can hop on a plane and meet them face to face to establish a strong business relationship. This is even better if you have met them at a trade show. A direct visit gives an opportunity to see their products and judge their quality, get to know them on a personal level, and show that you are serious about purchasing from them.
How to Buy from Wholesale Vendors
The first step into buying from a wholesale vendor is to make sure that you have a productive first contact with them. Here, you need to enquire about their wholesale unit prices, minimum order requirements, regions they supply, shipping costs, and delivery lead times.
Make sure you are honest about the size of your business and don't try to sound bigger than you are. After you are satisfied with everything, then you can go ahead and place your order online through their website.
Overseas vs Domestic Vendors & Suppliers
So, should you source your products from domestic or overseas vendors and suppliers? This will depend on the size and the needs of your business with each approach with having differing advantages.
Buying wholesale from Domestic Suppliers
Sourcing products from domestic suppliers in the US can be more expensive for a variety of reasons. You many find the price quote on the higher end of your budget, which will eat into your, which profit margins.
That means you may find it tough to compete with a large number of competitors sourcing products from overseas and offering them to buyers at near wholesale cost.
While working with domestic suppliers is going to be more expensive, it has the following advantages:
- You won't have to deal with the hassles of importing goods from the manufacturer. The wholesaler imports and warehouses them on your behalf.
- You don't have to deal with the shipping or customs clearance process. You are also cushioned from the cost of having to travel abroad.
- Buying from domestic wholesale vendors saves you time. You won’t have to do a lot of quality checks on your merchandise since the wholesaler has done it for you.
- Minimum order requirements are favorable when working with domestic wholesale providers. That means you can start with a smaller initial investment.
Buying wholesale from overseas manufacturers
The holy grail of merchandising is buying directly from overseas manufacturers and suppliers. But this is sometimes easier said than done, especially for SMEs.
The hard part is that it takes work, dedication, and time to source goods overseas. The best part is that you obtain goods at the lowest prices, and you will be able to compete favorably with other retailers in your niche.
Here are the upfront headaches you need to overcome when dealing with overseas wholesale vendors.
- Customs and logistics: You have to deal with the extra hassle of customs clearance and shipping logistics on your own. But you don't have to go it alone! Easyship can help you navigate the customs declaration process with automatically filled shipping forms and the shipping logistics with over 250+ affordable shipping solutions.
- Managing quality control: Since your products will be manufactured overseas in large quantities, maintaining consistent quality is a challenge you will have to deal with.
- Longer lead times: You have to plan your inventory requirements carefully to avoid inconveniencing your buyers. It can take months to have your products manufactured and shipped from overseas.
- Higher minimum order quantity: Different factories have different minimum order requirements that you must meet. That means you will have to order in large quantities.
- Longer product definition process: It takes longer to have samples made and send overseas for you to assess the quality of merchandise.
- Communication can be an issue: Most Asian manufacturers are not fluent speakers of English. That means you will have to rely on email communication or use an interpreter.
Best Websites to Find Vendors for Your eCommerce Business
Here is a list of websites where you can find wholesale vendors for your eCommerce store:
- Global Sources
- Light in the Box
- Worldwide Brands
- Cut out the middlemen by contacting the suppliers directly
- Make sure that the first contact is productive and aim to establish a professional relationship with the supplier company
- If you can't purchase directly from the suppliers, ask them for a list of wholesale distributors, and contact each distributor.
- Search for wholesalers online and through B2B marketplaces like Alibaba
- Always ask for samples before making an order
- Don't be afraid to make a mistake. Finding the best wholesale vendors is more of an evolving, trial & error process.
- Don't forget to bargain for better prices
The above online resources will help you vet different suppliers based on their product offerings, prices, shipping cost & lead times, and customer service. Finding a top wholesale vendor in your niche will be a great first step in building or expanding your product offering.
Once you are all set and selling, you'll want to make sure your shipping is optimized.
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