Part 2: Choosing The Right Supplier
First, it is important to know the difference between the two types of suppliers: wholesalers and manufacturers.
Manufacturers make the product. For this reason, they will only conduct business with you if you are ordering in bulk (or they typically offer smaller quantity orders for higher pricing).
Wholesalers buy products from the manufacturers. They have long-standing good relationships with manufacturers and are able to buy products for cheap. They then sell it to drop shippers for a small mark up. This means wholesalers are going to be more expensive, but, they will be able to better accommodate smaller orders. You will most likely be working with wholesalers.
Criteria for the right wholesaler:
- They require minimum order sizes (with this, it is smart to pre-pay your supplier a their minimum fee. This can be used as credit towards future purchases. This means you are essentially committing yourself to an initial amount without actually having to place orders without customers)
- They do not sell to the public (they require business verifications)
- There are no pre-order fees
- No ongoing fees (monthly, yearly)
How to find the right wholesaler:
- You can directly contact manufacturers of products and get their list of wholesalers that they distribute to
- Order from a competing drop shipper. With this order, you can back track who their wholesaler is. If another drop shipper is using that wholesaler, there is a high probability that they will be a good one.
- Use Google searches. Wholesalers are notoriously bad marketers. You have to dig deep within your Google search in order to find wholesalers
- Use SaleHoo. Visit www.salehoo.com to search for suppliers. SaleHoo is an online marketplace full of suppliers. Keep in mind that wholesalers do not put good money into websites, they will typically have 90’s looking websites.
- Use Wholesale Central. Visit www.wholesalecentral.com to search available wholesalers. The search function is not the best, and as we have said before wholesalers have bad marketing, so we recommend using various keywords to find different results.
- Use Oberlo. Visit www.oberlo.com to search suppliers as well.
Good suppliers have typical traits:
- Expert staff and a strong focus on getting things done. The supplier should be organized and efficient with their orders.
- Good support teams. Typically, good suppliers will supply you with a sales representative that should be dedicated to your success. If there are issues with orders, they should be ready and able to work them out.
- Email ready. Good suppliers can receive orders through email.
- Central location. It is very convenient to have a supplier that is centrally located. This most likely means lower shipping fees, lower shipping times, both adding value to you and your customers
- Technologically savvy. Good suppliers should be able to provide you with real-time inventory, online product listings, email capabilities, etc.
Test out your supplier:
It is a good idea to place test orders with a new supplier. With this you can see just how efficiently they process and ship your orders, as well as if your order is accurate, and how quickly they provide you with tracking information (invoices). This way you can see just how they will handle orders placed by real customers.
Paying your supplier:
Almost every supplier will only accept credit cards. It is smart to establish a business credit card separate from your personal one.
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