Of all the business decisions any e-commerce business will make, choosing a wholesale distributor is the most critical. That's because e-commerce businesses fall or rise based on their inventory.
The kind of wholesaler you work with will affect your prices, the variety of products you offer, and your clients’ satisfaction. Read on to find how to select the perfect wholesaler, no matter the kind of trade you are involved in.
Understand the Distribution Channels in Your Industry
Not all products are distributed through the same channels or supply chain. Depending on the industry, a product may go straight from a manufacturer to a consumer or through an exclusive wholesaler. The various kinds of wholesalers include:
For some products, you may be better off going straight to the source of the product: the manufacturer. This is often possible when your order is large, or the manufacturer is willing. This strategy cuts out intermediaries and reduces your expenses.
In some countries, only specific companies are allowed to distribute a particular product. To trade in such goods, you'd have no option but to deal with the exclusive wholesaler.
These wholesalers are responsible for distributing products in specific areas. Such wholesalers are particularly necessary if the source of the product is far away.
Jobbers are people who make daily deliveries to places like local grocery stores and brick and mortar businesses.
Research and find out which distribution model works best for your type of business. In some industries, the manufacturer doubles as the wholesaler. For instance, in the wholesale bracelets industry, you might find the same company manufacturing and distributing the products. This arrangement usually streamlines the supply chain.
Conduct Due Diligence
In some markets, you'd have several wholesalers or distributors. Before you settle on the one you are going to work with, make sure you ask all the right questions.
Compare the offers of various wholesalers to see which one best fits your business needs. For instance, one wholesaler may offer products at a lower cost, but the transport costs could hike the prices. Find out whether the company has any special offers.
Start your research by talking to the manufacturers. Often they have a list of credible wholesalers that you can work with to get the products. Alternatively, you can use online searches, eBay, wholesale directories, B2B marketplaces, amongst others, to find an excellent wholesaler.
Consider their Track Record
Before working with a wholesaler, you need to find out what they've already achieved. A novice may not deliver the way you'll want. Go on their website and read their testimonials and case studies. That's usually not enough because no company would put bad reviews on its website. So, use review sites like Yelp, Angie's List, and Glassdoor.
Also, talk to other business people who have used the service of the wholesaler you are looking at. They can offer you first-hand information about their service delivery. Another way to find out the kind of service you are likely to encounter is to test their customer service. A company that will deliver on its promises is one that prioritizes customer service.
Wholesalers are a vital cog in the wheel of every online or retail business. If your business is going to be successful, you'll have to work with a reliable and consistent wholesaler. In this article, we have explored some of the key things to look out for when choosing a wholesaler to work with.