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How to choose a wholesale supplier for an online business

Choosing an online 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 B2B company to develop a wholesale relationship, 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. You can even find wholesale suppliers that dropship products and ship their products directly to your customer. Read on to find out what you need to know about choosing the right wholesale provider to keep your business running smoothly.

Understand the Wholesale Industry

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.

Your Business Profile

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.

Where to look for wholesale providers

Use trade directories like TSNN or 10times, online business associations, and wholesale directories to find suppliers for product sourcing from Alibaba, NREL and Wholesale Central. You can also ask your local Chamber of Commerce or Small Business Development Center for advice on wholesale providers.

Criteria For Selecting a Wholesale Provider

To determine whether a wholesale provider is right for you, it pays to look at the following factors:

  • Product Offerings - It may be obvious, but it's important to ask if the wholesale provider offers the product and brands you want. Try to work with wholesalers that offer a clear product catalog that's easy to search and comes with plenty of product details to make the buying process as simple as possible. Also examine whether the wholesaler offers products that you don't currently have but want to offer at a later date, whether they have exclusive access to certain key products, and how consistently available their products are available so that you never run out of inventory.

  • Reliable Shipping - Even if you buy products cheaply from a wholesaler, if they're delivered late it could mean big losses for you. Essentially, an unreliable wholesaler will reflect poorly on you, meaning your ability to deliver excellent customer service to your own customers will take a hit. That's why it's useful to choose a wholesaler with automated shipping alerts, product tracking and a knowledge of your industry's shipping needs. For example, when choosing a food wholesaler, make sure they're using quality refrigerated trucks to keep your produce fresh.

  • Price - Price isn't always just determined by volume. Be sure to look into a wide variety of wholesalers, as there can be substantial price differences based on shipping distances, the wholesaler's relationship with manufacturers, and even currency exchange rates based on the company's geographical location. While you can always comparison shop across websites like Alibaba and Wholesale Central, it also pays to use unorthodox channels like contacting manufacturers directly and asking them what wholesalers they recommend.

  • Customer Service - Great customer service is a huge factor in picking the right wholesale provider. Can you easily reach someone to speak about an issue? Is there a help desk, live chat or support number available? You want to ensure you're working with a wholesale provider that's there when you need it.

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.

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