As a drop shipper or ecommerce store owner, one of the biggest challenges you can face is finding a reliable supplier.
The best wholesale suppliers for your company will meet your budget, shipping requirements, and minimum order quantities, yet finding one takes a lot of research.
To assist, this article will explain how you can search for potential wholesalers and explore several best practices for collaboration with one.
Now, let us begin.
What is a wholesale supplier?
A wholesale supplier is a business that buys goods in large quantities from manufacturers and sells them to brick-and-mortar stores or online retailers for a profit.
Without wholesalers, manufacturers would have to market directly to retailers, so you can also consider wholesale suppliers as middlemen in the supply chain.
The wholesale business model thrives by earning significant discounts through bulk purchases, which they can pass on to retailers for competitive advantages.
Wholesalers also operate with a product license to indicate they are manufacturers or resellers of goods. As such, most wholesale businesses cannot make their products available to consumers and non-businesses, at least not at the same price they offer retailers.
How to find a reputable wholesale supplier?
Visit wholesale directories and marketplaces:
Some companies provide directories where you can browse lists of wholesale suppliers catering to specific industries and products. Some offer this service for free, while others charge membership fees.
Using these platforms, you can easily search for relevant information about hundreds of approved suppliers and thus inform your decision comprehensively. Here are a few of such directories:
- www.thewholesaler.co.uk
- www.wholesalecentral.com
Wholesale marketplaces are also sites that list wholesalers in different industries. But unlike directories that chiefly allow you to connect suppliers, marketplaces let you order the supplier instantly, just as if you are shopping on Amazon.
Due to their flexibility, wholesale marketplaces like the ones below have become very popular in recent years:
- Alibaba
- Oberlo
- Wholesale Central
- Printful
- Sprocket
- AliDropship
Search the web
Another way you can find wholesale suppliers is by searching on Google.
First, run a search for suppliers local to your area and add the ones that strike you to your list of options.
If you cannot find anyone in your area, extend your search and really mess around with your keywords to get varied and targeted results. Say you are looking for leather jacket wholesale agents, do not stop your search at [leather jacket] wholesaler. For further searches, use modifiers like distributor, reseller, bulk, warehouse suppliers, etc.
Subscribe to trade publications:
Find newsletters, magazines, and publications targeting retailers in your industry. Most advertisers fighting for placements in these publications will likely be manufacturers or distributors.
With just a little searching, you can find a few options on a website or the back of a magazine. Joining social media groups in your niche and talking business with fellow merchants is another bright way to get industry information.
Check the label on products:
As straightforward as it seems, reading product labels to find supplier or manufacturer information might have flown over your head. With the contact information you come across, reach out to manufacturers or distributors, state your interest, and ask for information about wholesalers.
Contact the manufacturer directly:
Another straightforward method is to contact the manufacturer directly. Thriving manufacturing businesses usually know a lot of wholesalers because they work with them. Depending on the nature of your desired product, the manufacturer may even be willing to work with you to dropship. If this is the case, they will likely promote themselves and urge you to request a quote.
Ask your network about wholesale suppliers:
Contacting business people in your network to ask about wholesale suppliers is a resourceful way to find wholesalers. In practice, this means asking on LinkedIn, using online forums, joining local chambers of commerce, and even attending trade shows so you can connect with suppliers in person.
Factors to consider when evaluating wholesale suppliers
Once you have made a list of wholesale suppliers that might fit your requirements, what factors should go into your selections? Let us find out.
Local vs. global
Most new retailers are eager to source from China because tough competition and low manufacturing costs result in affordable prices. However, there is a case for local sourcing that all businesses should consider. In particular, buying from local suppliers reduces the risk of handling defects, resulting in lower shipping costs and import duties.
Location
It is crucial to be aware of distributors’ location because the further away they are, the higher the shipping fees. For dropshipping stores, as you might know, same-day, two-day, and fast delivery, in general, are the new norm for businesses that want to stay competitive.
Additionally, if there is high demand for your products, a wholesale supplier who cannot deliver quickly to different locations will make customer satisfaction an issue.
Industry
Looking for suppliers who have worked in your industry (e.g., automotive, apparel, etc.) is always a plus. If they have a positive reputation and long-term board executives, you can guarantee they have a lot of experience.
Price
Wholesale companies offer different discounts, minimum order quantities, and cost-per-unit prices.
Before making a final selection, take detailed notes on the prices and price items the suppliers you reach out to quote, then compare them. Generally, the more you buy, the higher the discount or the less the cost per unit. So do not hesitate to negotiate prices that align with your budget.
Reputation
When something goes wrong, you want peace of mind knowing your supplier will proactively fix it. This is why you must vet the reputation of wholesale distributors and manufacturers during your evaluation. For example, by researching their reviews on Google, social media, and sites like Trustpilot.
Shipping policies
Before agreeing to work with any supplier, know their stance on shipping and returns (i.e., do they accept returns, exchanges, etc.). Doing so lets you clarify what customers, in turn, can expect when they purchase from your store.
B2B ecommerce platform
Few wholesalers still require clients to place orders via phone and email. Steer clear when you encounter such suppliers. To save precious time and money by automating the process of preparing orders, focus on finding suppliers who use a robust B2B ecommerce platform.
Do they sell to the public?
Most wholesalers must obtain a license that proves they sell only to businesses. When a wholesaler sells goods to consumers, it is generally a red flag you should avoid.
What to ask when contacting a potential wholesale supplier?
Once you have escalated talks with vetted suppliers, ask these key questions:
What are your minimum order quantities (MOQs)?
Minimum order quantities are the least amount of orders a supplier allows you to place. For new or small retailers with a limited budget and storage space, finding a wholesaler that matches your MOQ requirements becomes important.
What is your cost per unit?
Cost per unit is another detail to clarify with potential suppliers. Based on economies of scale, the more units you order, the lower your CPU should be. However, do not make the mistake of overstocking to gain a lesser cost per unit, especially when you are just starting. If demand does not match the amount of inventory you ordered, you will be stuck with unmoving stock – no pun intended.
What is your return policy?
If there is a problem with an order, will you have to cover the cost of returning defective units, or will your wholesaler cover them? To prevent disagreements in the future, clarify this with potential suppliers.
Do you have liability insurance?
Liability insurance protects you when someone gets injured using a faulty product you sold to them. Be careful working with manufacturers and distributors who do not have liability insurance.
What customers have you worked with, especially in the West?
By asking this question, you can gauge the wholesale supplier’s experience based on the reputation and scale of their past and existing clients. Preferably, you want to work with suppliers familiar with Western markets because they are better equipped for quick deliveries and timely dropshipping fulfillment.
What is your lead time for X product?
The time between receiving an order and the date it is shipped out allows you to guarantee customer satisfaction and not keep them waiting indefinitely.
Tips for engaging potential wholesalers
Know the kind of wholesaler you need
Are you looking for a dropshipping supplier or a regular wholesale supplier? Understand the difference in their roles and decide the best option for your business.
- Regular wholesale supplier
With regular dropshipping suppliers, you purchase products in bulk, receive them at your storage facility, and fulfill orders yourself. So essentially, these suppliers solely help you bypass the product development and source products at discounted prices.
- Dropshipping wholesale supplier
Instead of handling fulfillment yourself, you do not have to store and ship inventory when you work with B2B dropshipping wholesale suppliers. With this model, the manufacturer or distributor is responsible for shipping the items directly to customers.
Collect samples:
Before signing contracts or purchasing large wholesale orders, request samples of the items. Most wholesalers and distributors allow you to bypass their MOQs and place a sample order. And some may even give you samples for free, though this is less common.
Check for customer reviews:
Customer reviews are a great way to vet potential suppliers because they paint you a picture of what it’s like to work with them. Run a Google search such as “supplier name review” or “supplier name scam” and assess your findings.
Final thoughts
When you’re done researching and vetting potential suppliers, the next step is to get in contact with them. Do this by reaching out via email and by asking the questions we laid out.
When you’re almost certain you’ve found the right one based on the criteria from earlier, don’t hesitate to give it a go. Even if that supplier turns out to be unreliable, you’ll learn from experience and always be able to change.
