How to Find Wholesale Products
The first thing you should think of when opening a retail business is finding a trustworthy wholesale supplier. Finding the right supplier for your business can be a hard and frustrating process. Furthermore, there are many mistakes that new retail businesses tend to do. They could all affect your business badly. Thus, understanding the right methods and common pitfalls of wholesale product sourcing is a must. This article will guide you through a comprehensive step-by-step process. It will also provide you with the best tips and practices to find sources for your products in the US.
- Choose what you’re going to sell:
First and foremost, you must decide on what exactly you’ll be selling. This depends on many factors, including your personal interests. In any case, you should choose the products that are fairly rare on the market, yet they also sell well. Meanwhile, if you choose a line of products with a big base of competitors, it will be a lot harder to grow your business.
Whether you are selling your own products such as handmade jewelry, or wholesale products from a manufacturer, you must do your due research. It is important to get a hang of current trends. If you are opening a physical shop, focus on the trends in your local community. On the other hand, if you are opening an online store, your customer base will be much wider. In this case, it would be best to use some of the free tools available online. Focus on the most recent trends and some older trends that tend to be consistently active through the years.
- Investigate different supplier types:
Choosing the right type of a wholesale supplier largely depends on the type of business you’re opening. Some of them are best for online businesses, but they won’t fit physical stores, and vice versa. Here are a few supplier types you can choose from:
- Manufacturers: Many business owners choose to get their products directly from the manufacturer. Purchasing your product without a third party will save you a lot of money in the long run. However, the minimum order is usually much higher than when buying from distributors. Most manufacturers sell their product to small businesses through local distributors. Check the company website of your desired manufacturer for this information.
- Distributors: Distributors usually offer products from a few manufacturers, but they stick with the same category (e.g. clothes). When you buy from distributors, you will pay a bit more for your products. However, the minimum order tends to be much smaller. Also, you’ll be able to buy products from several manufacturers in the same order. If you want to offer a wide variety of products from a number of manufacturers, distributors should be your go-to choice.
- Liquidators: If you want to save the most money on your purchases, opt for liquidators. When you purchase a bulk order from a liquidator, they might give you up to 75% discount! On the other hand, be careful with your purchases. Once the products are sold out, you probably won’t be able to get them anywhere else.
- Importers: If you are leaning towards products from different countries, the best way to get them is through an importer. This is a more expensive option, but you’ll have less struggle with competitors.
- Drop shippers: For those who own an online business, drop shippers are the way to go. You won’t have to pay for expensive warehouse rents, or worry about the manufacturing process. Drop shippers are similar to distributors, as they also buy directly from manufacturers. However, they send products directly to your customers in your name. This might be the best option for those who are just starting out. The only thing you should consider are much higher product prices, when compared to other types of wholesale suppliers.
- Where can you find wholesale suppliers?
The general rule of thumb is to search for suppliers online. You can use the usual search engines such as Bing or Google, or opt for those that are wholesale-specific. Wholesale Central and Top Ten Wholesale, for instance, are very good directories with wholesale suppliers. Additionally, you could also check niche-specific trade lead sites, or a general one, such as Pauldigo.
If you want to source your wholesale suppliers in a more traditional way, there are great options for you too. Some of them are trade shows, printed directories and publication, and, of course, word of mouth.
- Conduct a proper research
Like with all things online, there are many scammers and fake businesses in the wholesale industry. Furthermore, they might be a real business but are seriously lacking in quality. You must research thoroughly if you want only the best for your company.
The first thing you should look at are their policies, including damages, backorders, and returns. Furthermore, make sure they have a physical address on their website. Avoid suppliers that provide only their phone number and email. If there is any information unavailable on the supplier’s website, contact them directly. In addition, ask them for customer references, or search for real customer reviews yourself.
- Check out some online forums
Forums can be a great source of information. There you can get valuable information and ask additional questions. Be careful though, because business forum members may not honest. Many of them are only there to sell their services or products. For an additional test, check your potential supplier through the websites such as Hoover’s Online and Better Business Bureau.
- It is time to contact the supplier
Most vendors have professional online payment systems set up. Beware of wholesale suppliers who avoid to provide you with real wholesale prices. As wholesale suppliers generally only work with businesses, you can detect a fake supplier if they don’t ask you your tax ID.
The requirements you have to take care of before starting to buy and sell products can vary in different states. Nevertheless, there is a general list of things you should acquire before starting your business:
- Local Business License: Most cities and counties will require a local business license from anyone opening up a company. You can easily find out if this is the case in your area by paying a visit to your city hall.
- State Business License: You most likely won’t need this license, unless you are selling products such as cigarettes and alcohol. Call a local government office to find out if you need it.
- Sales Tax License: If your state collects sales tax you will need to get this license. Find out how to acquire it by calling your State Franchise Tax Board.
- Federal License: Only the businesses that work with products regulated by government agencies will need this license. If you’re not sure if you need it, check with your state government office.
- Sales Permit: This permit usually applies to those who plan to resale the products they buy from a wholesale supplier.
- Build and maintain a friendly relationship with your supplier:
Naturally, this step applies to all wholesale suppliers you’re doing business with. By having a positive relationship, you can expect better prices and more product options. It will also allow you to resolve any potential disputes much more easily.