Choosing a wholesale provider is a critical business decision, affecting your ability to compete on price, deliver products to your customers on time, offer the right product selection to satisfy customer demand, and ultimately determine margins. As you can see, an ecommerce business is no greater than the wholesaler they work with. When picking the right wholesaler, it's important to consider factors like price, customer service, product portfolio and reliability that are key elements for deciding which wholesale provider will work for you. Read on to find out what you need to know about choosing the right wholesale provider to keep your business running smoothly.
First, you should understand the whole industry is huge, with the 50 largest wholesale distributors only producing 25% of the industry revenue out of a total of 330,000 wholesale providers. The wholesale industry also serves a wide variety of industries, including apparel, food and beverage, medical and electronic goods, just to name a few. Given the fragmented nature of wholesalers, it's important to do the right research to weed out the wholesalers who aren't going to save you time and money.
Often, your relationship with a wholesaler is partly determined by the size of your business, as this can have a significant influence on pricing. Determining the price you can secure should be the first step in making your selection and a fundamental way to obtain low priced goods is to buy in volume. If you're a small business and unable to purchase products in high volumes, it may be necessary to build your relationship with a wholesaler over the long-term--usually by signing a contract--as this may help you command a lower price. Unfortunately, some wholesalers place too much emphasis on a small number of high-end clients, and it's important that you aren't lost in the shuffle.
As a result, smaller or medium-sized companies should pick a wholesaler that delivers personalized attention, has an excellent reputation in the industry based on testimonials and references you request, and provides you a clear volume discount pricing scheme so you can plan for the future by obtaining greater discounts as your business grows.
Use trade directories like TSNN or 10times, online business associations, and wholesale directors such as NREL, Alibaba and Wholesale Central. You can also ask your local Chamber of Commerce or Small Business Development Center for advice on wholesale providers.
To determine whether a wholesale provider is right for you, it pays to look at the following factors:
Ultimately, it's important to think about how a wholesale will impact your day-to-day relationship with customers. At the same time, you need to select one that makes financial sense while also having the confidence that you have a business partner you can rely on.