A wholesaler is a person or company from which you source your products as a retailer. They will typically sell you products in bulk, at a discounted or reduced price to allow for resale to your consumers.
There are many important factors to consider when choosing a wholesaler, such as pricing, the level of customer service, their reliability, and their product portfolio.
Pricing is calculated according to a lot of different factors. These may include the wholesaler’s relationship with the manufacturer, the shipping distances, and currency exchange rates.
Often, bulk purchases will reduce the cost price of individual units. This is sometimes agreed for each order, but more commonly you will find yourself signing long-term contracts.
This gives you a legal obligation to purchase a specific volume of inventory in a set period of time. This will also give the wholesaler a legal obligation to reduce the cost of individual units during this period.
It is worth shopping around and contacting a few different wholesalers for quotes before committing to a single one. There are many websites that are designed to help you with this process, such as Wholesale Central, TSNN, 10times, NREL, and Alibaba.
If you are brave, you may even consider contacting the manufacturers directly. Ask them which their recommended wholesalers are, you may be surprised who they suggest.
You will want to build a good and strong working relationship with your wholesaler. They will be vital to the maintenance and success of your business and it is important that you are able to communicate easily and effectively.
Look for wholesalers who have help desks, live chats, or customer support numbers clearly visible. This suggests that this aspect of their business is important to them and will tell you a lot about their values.
There will undoubtedly be times where you need to contact your wholesaler, and it is good to know that they will be there for you when you do.
As the wholesaler will be responsible for supplying you with the bulk (if not all) of your product inventory, it is vital that you can rely on them. You should ensure your wholesaler of choice can consistently deliver inventory on time.
A good way to gauge this is by checking whether the wholesaler offers automated shipping alerts or product tracking. We recommend talking to them and ensuring that they are aware of the specific shipping needs for your industry.
By this we mean ensuring the transport conditions for your products are correct – such as refrigerated trucks for the transport of fresh produce.
Prior to selecting a wholesaler, it is vital that you ensure they will be able to meet your needs. If you know specific brand names and products that you wish to sell, your wholesaler must have access to them.
Check out products that you may wish to stock in the future too. Planning ahead is always a wise business strategy.
It is a good idea to check out a product catalogue produced by the wholesaler in question. If this is laid out clearly and is easy to navigate, this should give you good faith in the wholesaler.
All of the products on offer should come with a clear descriptor to make your buying process as hassle-free as possible.
Many wholesalers will also offer exclusive access to a select range of product options. As you begin to use your wholesaler of choice consistently, you should take note of how often and consistently their products are available.
This will give you a good idea of how often you should order to ensure you never run out of inventory.
As we mentioned, the geographical location of your wholesaler can have an impact on their pricing. You need to find a wholesaler that supplies y9our geographical region. Ideally they will be within the same region as the hub of your business, to keep costs low.
People are becoming increasingly aware of fair working and trading practices. This means that it is vital to be able to trace your products all the way back along the supply chain. Many customers want an eco-friendly, fair, and sustainable supply chain.
For you to be able to provide your customers with this information, your wholesaler must be open and upfront about how their products are sourced and produced. Do not be afraid to ask them questions about this, they should be able to provide you with a clear answer.
We recommend asking questions that you think would be important to your customers. This will prepare you to answer any queries that may arise as you are selling your products.
What are some good questions to ask a potential wholesaler?
How many years have you been in this business?
This question will give you a good idea of the level of trust you can place in the wholesaler. If they have been in this industry for a number of years it suggests that their business model is solid and that they will consistently be able to deliver on the quality of service that they claim to offer.
What is your reputation within the industry?
This question goes hand in hand with the one above. A good reputation suggests that the wholesaler is reliable and delivers consistent product quality. A wholesaler with a poor reputation is unlikely to provide the same level of service.
Do you sell to consumers or end-users?
If the wholesaler answers yes to this question, this means that they will be working in competition to you. They are using you and your platform as a way to fill gaps in their distribution channels and make more revenue. This does not make them your best option as a wholesaler.
Some other good questions to ask include the ones below.
- What are your fill rates?
- Are the products delivered using outsourced trucking companies or using the wholesaler’s own equipment?
- Are there marketing and sales training support available to allow your business to continue to grow?