One of the first things to do when you’re planning an online store is secure reliable sourcing. After all, until you know how much your products are going to cost, you have no real idea of your profit potential. This makes getting consistently high-quality product at a good price an imperative. With that in mind, here’s how to find a wholesale supplier for your eCommerce store.
The Nature of Your Business
Most legitimate wholesalers will require you to be a licensed reseller and have a Tax ID Number. Further, you have to agree to purchase goods for resale rather than personal consumption. In a lot of cases, the volume of product they can anticipate moving through your channel determines the pricing you can get. The more you sell (or, said differently—buy from them) the better the terms (lower prices, more time to pay, reduced carrying charges). Some might even try to lock you into a long-term contract, with the carrot of better pricing, right away.
Qualities to Seek
There are wholesalers who prefer dealing with smaller retailers; however, this tends to spread their customer service rather thinly. If you’re interviewing such a supplier, you’ll want to make sure they’re capable of providing you with individualized attention if concerns arise. The good news is there are more than 330,000 wholesalers out there who’ll consider working with you.
However, this also means due diligence is paramount. You want people who have strong word of mouth and offer a clear volume discount pricing schedule to help you forecast your revenue flow. You’re also looking for a well-defined product catalog, fulfillment upon which you can rely—with well-defined shipping rates—and again, excellent customer service.
A lot of startups appreciate the way drop shipping frees them of a number of costs and responsibilities. When you work with a supplier offering this service, you’ll eliminate warehousing expenses, the logistics of moving product to the customer and a dedicated shipping staff—which eradicates the need for salaries and benefits for those functions. On the other hand, you’ll give a key aspect of your operation to an outside organization, over which you’ll have very little control. When you set up your free ecommerce store, you must decide if the pros of drop shipping outweigh the cons for your particular undertaking.
Where to Look
Everything is online these days, so the best place to start buying is the same place you’ll sell—on the ‘Net. The Trade Show News Network puts on events where suppliers gather to meet new retailers. These are a great way to find contacts and form relationships. Alibaba is a good resource for connecting with Asian suppliers and Wholesale Central is bursting at the seams with entities looking for companies like yours with which to do business.
Watch Out for Resellers
Some people pose as wholesalers, offering what looks like a good price, until you’ve been in contact with a real one to see the difference. Keep in mind, the Manufacturer’s Suggested Retail Price (MSRP) is just that—suggested—so they can sell to you for below list price. They will still make a profit on the deal, but your margin will be very slim. Choose your vendors carefully.
Your ecommerce store could well be the answer to establishing a flexible and sustainable income, depending upon how you find a wholesale supplier. If you take your time, check references and look out for red flags, you’ll get off to a good start.