SCORE

If you own a small retail store or service business, there’s a good chance you’ll need a wholesale supplier to provide essential goods. However, with thousands of wholesalers throughout the country, it can be a difficult (and sometimes overwhelming) task finding the right one to best meet your needs.

Before beginning your search, it’s helpful to understand the five main types of wholesalers. Here they are, as described by Entrepreneur.com:

  • Manufacturers - Most small businesses don’t purchase goods directly from big manufacturers because they require incredibly large sales volumes to make it worth the cost.

  • Importers - If buying directly from overseas, importers can be a good option, but these wholesalers are typically only used by large businesses.

  • Distributors - Small businesses typically buy wholesale from distributors, who store products in bulk and repackage them in smaller quantities.

  • Drop shippers - Many online small businesses use drop shippers since they have the capacity to store large amounts of products and can ship to customers whenever orders arrive.  

  • Liquidators - Liquidators are great for hard-to-find or discontinued products. However, liquidators generally are unable to supply a steady stream of day-to-day goods that are essential to running a small business. 

A good first step in finding a wholesaler, as is the case with nearly every aspect of running a small business, is doing your research. Scour the web to find wholesalers near you that supply goods and products that are important for your business, and make sure to include your zip code in the search. Explore online trade associations and wholesale directories to identify suppliers for your particular industry.

Visit trade shows to network with others in your industry and find out which wholesalers are reputable. Talk to wholesalers who are exhibiting and ask them questions about product, process and pricing. Also, make sure to bring marketing materials so you can easily explain what you are selling and how the wholesaler fits into your overall business strategy.

Keep asking questions. Talk to similar small businesses in your area to see if they are willing to share who supplies their products and what level of service the wholesalers provide. Larger businesses in your industry may be able to provide lists of potential distributors as well.

After you have completed your research and identified the wholesaler you want to work with, check with your state’s consumer affairs office for any complaints or issues. Other great places to check may be sites like Yelp, Angie’s List and other similar review sites to get an idea about what it’ll be like to work with a particular wholesaler.

Before entering into an agreement with the wholesaler, make sure to talk to the sales representatives about discounts on bigger purchases, how long it takes to process an order, return policies and any other important logistics.  Consult an attorney before officially signing any written agreement to ensure there are no hidden or unreasonable terms or conditions.

After you begin receiving products from the wholesaler, track your total costs, including overhead, to determine if you need to adjust pricing levels in order to improve your margins. If your margins are too low, you may be able to negotiate cheaper ordering rates with the wholesaler.