Wholesale Sourcing Tips

Starting a business? Looking for products to sell? Sourcing wholesale products can be challenging, and there are certainly lots of pitfalls that business owners need to look out for. This hub serves as a guide with some helpful tips to get you started.

1. Drop Shipping Companies- low cost of entry but careful on service/quality
2. Wholesale Companies- usually requires reseller certificate & minimum buy
3. Liquidation/Closeout Companies- be careful on knowing what to buy
4. Importers- Wholesalers who purchase products from overseas and resell to other wholesalers or directly to retailers. Buyer beware in sourcing
5. Manufacturers/Distributors/Reps- usually requires larger buy & ongoing relationship

• Online Search - goWholesale (Vertical), Yahoo or Google (General)
• Online Directory Sites- WholesaleCentral
• Online Import Sites- Importers.com, Alibaba, Global Sources
• Online Auction Sites- Liquidation.com
• Obtain Opinions at Community Forums- goWholesale Forums
• Print Publications- Retailers Forum, Closeout News
• Industry-specific Trade Shows- goWholesale has a trade show center and so do publications as well as directory and import sites

Finding a wholesale distributor for products to resell can be challenging. With millions of categories of wholesale products, the first decision to be made is whether you want to purchase from wholesalers locally.

Buying wholesale locally has its benefits:

1. Before buying wholesale merchandise, if you find a local wholesale supplier, you can visit the wholesaler to inspect goods to determine their quality. Wholesale can vary from wholesale merchandise that is new, directly from manufacturers, to products that are returns, shelf pulls, or used. Wholesale returns can vary from goods that are the wrong color or size to products to goods that can have warranty or defect issues. Likewise, wholesale shelf pulls can be due to cycle time - new inventory must replace old inventory- or it can also be inventory that is near its expiration date. Wholesale used goods are also sold- in this case, buyer beware and if you cannot visit the wholesaler, make sure you gather as many pertinent details as possible- ask for pictures, origin, etc.

2. Another benefit of a local wholesaler is that shipping costs can be avoided for "cash and carry" wholesale. If you are paying for shipping, ensure you fully understand all costs of shipping, time for shipping, and any fulfillment costs.

3. Wholesale purchase via wholesalers often requires a reseller certificate or license. Wholesalers often charge minimums and wholesale products are often sold in lots, by pallet, or by truckload.

Importing

The flip side of local wholesalers is companies who export their goods. Often called importers, there are literally millions of companies who import wholesale merchandise around the world.

There are critical details while researching wholesale importers:

1. If you are looking to wholesale export, we recommend you ask for a sample. Starting with traceable wire transfer or credit card purchase is best. We also recommend before working with a wholesale importer, to ask for references.

2. Wholesale importers other tips: understand all tariff and trade costs, length of time for shipping, and whether a good can be imported into your country. Be careful!

For more information on importing wholesale products, check out the following articles:

What You Should Know About Importing Products

Basic Due Diligence for Sourcing Products Abroad

To dropship is to have a company maintain an inventory, package and address the item, and ship the item. A drop ship wholesaler is a company who sells wholesale goods and then charges for the activities of fulfillment and shipping. The good news as a retailer (whether online or traditional retailer) is that you can save money for warehousing inventory, for the process of fulfillment, shipping costs, plus the cost for any relationship that is required with a direct manufacturer.

Many dropship wholesalers are also known as an online dropshipper. An online dropshipper is a wholesaler who shows their products online- many charge a membership fee that is either monthly, annual, or on a per transaction basis. It is important that you ask what the dropshipping fee is required for- many require it for membership or access to drop ship products. Dropshippers often charge for their valuable services- fulfillment, shipping, etc. so it is important to ask about their fee structure. It is also important to ask the basic rules around wholesale and whether the dropship wholesaler is for new wholesale products or for used wholesale products.

How can you be careful about choosing a dropshipper?

1. Ask for references for those who have used the dropship wholesaler in the past. Use wholesale forums to ask others about dropshippers.

2. Understand the fee structure and what you are receiving - make sure that you can sell the products at a higher price than all the fees combined.

3. Ask for actual pictures of products rather than stock images.

For more information on working with dropshippers, check out the following articles:

Choosing the Right Drop Shipper

The Value of Drop Shipping

Types of Liquidations and Closeouts: Customer Returns, Scrap, Recyclable, Refurbished, Overstock, Shelf Pull, Discontinued

1. Customer Returns Doesn't Mean the Wrong Color- It normally means warranty and defect issues

2. Closeouts can have limited sizes, colors and can be the most difficult to sell; however, there are often gems in the mix. Analyze what happens if the full purchase is not sold due to size or color selection

3. Inspect if you're able to - nothing substitutes for a physical inspection of a lot.

4. Evaluate location of goods - shipping can really add to costs and defeat the purpose.

For more information, check out the following article:

Buying Surplus and Closeout Merchandise