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4 Tips for Researching and Finding Wholesale Suppliers

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4 Tips for Researching and Finding Wholesale Suppliers

By Caron_Beesley, Contributor
Published: July 5, 2012 Updated: February 19, 2014

Starting a retail or service business? Looking to form relationships with wholesale suppliers?

There are currently 300,000 companies in the U.S. wholesale distribution industry, so as you can imagine, finding and forming trusted relationships with wholesalers takes time and research.

Here are some tips for finding wholesalers, and best practices for entering into agreements with them.

1. The Wholesale Business

The wholesale industry is large and highly fragmented, with 50 of the largest distributors generating 25 percent of industry revenue. Wholesalers serve retailers and other service businesses through a variety of distribution channels and supply chains. At the top of the chain are manufacturers (including importers or exclusive distributors – who also sell to wholesalers). Next are wholesalers or regional distributors (who distribute the goods locally) and brokers/jobbers (who deliver goods to local small businesses such as independent produce stores).

2. It’s All About Volume

The wholesale business is volume-centric. The more you can buy, the lower wholesale prices become, and the higher your profits are as a result. So as a new small business, it’s unlikely that you’ll be able to negotiate relationships from a high-volume wholesaler, simply because your sales volume won’t yet support buying in any kind of bulk. Smaller wholesalers will sell and ship to small businesses, and as you move forward and your sales increase, you’ll be able to graduate up the supply chain to negotiate higher volumes and lower rates.

3. Researching and Finding Wholesalers

Finding wholesalers takes time, but there are a number of best practices you can use to help your research efforts:

  • Search the Internet –Search for wholesalers by product to help you pinpoint local suppliers (this will bring up nationwide suppliers), then add your zip code to the search so that your results are localized. You can also search YellowPages.com and online associations, trade directories, or wholesale directories such as Wholesale Central or Wholesale Network.
  • Trade Shows – Trade shows are great venues for finding wholesalers if you’ve got the budget and the time. Trade show directories such as TSNN and 10times can help you pinpoint events by industry and location. 
  • Trade Magazines – Check out the ads and classifieds for wholesalers in your industry.
  • Ask Around – It might not be appropriate to ask your competitors where they source their inventory from, but ask around if you are out of town attending a local business networking event (Chamber of Commerce, Small Business Development Center, etc.).
  • Talk to Brand Manufacturers - Brand manufacturers sometimes sell wholesale, but usually only in high volume. However, they might be able to refer you to wholesalers or distributors that will sell to small businesses.

4. The Wholesale Agreement

Now that you’ve found your supplier, do your due diligence. Ask about volume discounts, return policies, and order processing time. Before you sign any contract, be prepared to negotiate pricing terms, minimum order quantities, delivery schedules, etc.  Add these agreements to the terms, and consider having an attorney review it before signing.

Don’t forget to ask for references and do your own research. The Better Business Bureau is a useful resource for a quick background check for complaints. This blog series also offers pointers on researching businesses that you work with: Researching a Company - Part 1 and Part 2.

Got questions about finding or working with wholesalers? Post them in the SBA Community Discussion Boards.

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About the Author:

Caron Beesley

Contributor

Caron Beesley is a small business owner, a writer, and marketing communications consultant. Caron works with the SBA.gov team to promote essential government resources that help entrepreneurs and small business owners start-up, grow and succeed. Follow Caron on Twitter: @caronbeesley

Comments:

Thank you Caron for the tips. One of the most overlooked aspects of buying from wholesale suppliers is the issue of product authenticity, standards compliance and regulatory guidelines. This is especially true when it comes to products such as cosmetics, fashion, sunglasses, electrical goods and beauty treatments/medications. No matter how good your wholesale supplier is, it is your responsibility to ensure that the product you provide to your customers is the right one. I have come across surprising cases where even large retailers have fallen victim to fake goods entering their supply chain through wholesalers, resulting in damage to their brand and loss of trust with their customers. One of the ways by which you can ensure that you do not become a victim is to ask the wholesaler or the brand owners if counterfeit versions of their brands are out there and if so how to detect one. Most brands incorporate features in the packaging giving you opportunity to spot a fake through random inspections. We do this all the time in our business and it gives our customers peace of mind that they are getting the right stuff. On the issue of standards compliance get to know the kind of certifications/regulations a product should comply with before it can be sold in the USA or globally. Again check with your wholesaler and visit websites like the US Customs and Border Protection run website StopFakes to get use their search to identify troublesome imports.
Great tip using tradeshow directories to track down suppliers. Just to add to that suggestion, many tradeshow websites will list the tradeshow attendees which gives you a great list to call through or targeted websites to visit for your given niche. This is something that we regularly do when we find suppliers for online sellers. Just throwing this out there but if you need help finding suppliers and want to learn how to do it yourself, in detail, AND have real help tracking them down then check us out at supplierwise.
I think it is mostly out developing relationships and finding out who you can trust in this business. When you find a good wholesaler you will know it. To be the best wholesale company, they have to be the best at purchasing and service.
We've been in the business for more than 20 years, we've seen it all. The biggest thing to watch out for is someone reselling from another wholesaler. You might be paying a lot more than you need to. Often, we here from clients about canceling orders from other wholesalers to later find that they don't have the inventory, they are just waiting for the orders to come in, and then they ship it. Biggest take away, make sure they own their own inventory.
I really enjoyed this piece! From my research so far, I have also come across some of the following tips: 1. As you mentioned, manufacturers are at the top of the value chain. This means that wholesalers who source from manufacturers before selling to independent stores must also mark up their product prices in order to make a profit. It may save the small business owner even more money if they are able to find and deal with a manufacturer directly. 2. When dealing with a wholesaler or manufacturer it is important to verify their identity and make sure you are not dealing with a scammer. I have seen recommendations to request references from the manufacturer, copies of their business licenses, and also verify their phone numbers, for example to make sure the number is registered to the same address where the manufacturer or wholesaler claims their business resides. 3. Another tip I have found related to the Wholesaler Agreement when it relates to dealing with manufacturers is to be sure to specify who owns any molds that are created in order to make your product. Some manufacturers will want to own the molds, but for design infringement protection it is better for the small business owner to specify that they own the molds that the manufacturer produces to create their product. All the best! Edward
Hi, I so your tip regarding: 2. When dealing with a wholesaler or manufacturer For example currently I was thinking to start to sell products on amazon and I want to use the FBA program, I also want to try to sell on a eCommerce website and ebay. But I am really concern about where would be a good place to find cheaper products and as you said I don't really know if a company is good or bad. I mean if is a company from US you can check BBB. But if is a company from another country how I will be able to do this? I so really good deals on a website called alibaba but I am not sure if I should invest some money there. You have any other tips that you can give if a company is from another country? Thank you, Jose
Hi, I have years of experience and got my feet completely wet in trading. Out of my experience it is quiet tricky in choosing supplier especially without physically traveling to sourcing company country. 1. If you think about sourcing goods from china for your business (Small, medium) you can use Alibaba, Ali express, made in china and like others. But when it comes to choosing supplier from this website, Make sure you ask the supplier to produce their registration certificates. Some suppliers will quote you with bottom low price to attract your attention, be very cautious as they provide very low price it is good to make enormous profit but when it comes to quality it may not sound healthy. So check for quality and price before nailing the supplier. If you plan to export to European, American continents the supplier need to have adequate quality documents to clear logistics otherwise it is a pitfall. 2. once you nail the supplier down don't immediately sing any sort of sales contract before you dial the number and check is that company is really sound and stable. email the contact person and ask for adequate documents (Registration, Payment terms, Quality Certifiacte4s, Logistics Details, Quality Control). Communicate clearly these terms in mail with the supplier. 3. Before choosing a container for shipment, choose some samples to test the quality and the efficiency of supplier. I knew it is quiet time consuming but trust me it is more safe. 4. Once you are happy with shipment, Quality and price terms with the samples now time to get your feet wet. Place the order and check for FOB price and CIF prices in detail. If you are placing a very huge order break it in to small parts or visit the supplier directly in china to save yourself from pitfalls. If it is a small or medium term business it should not be very big deal as long as you followed the above said. for larger sourcing better to at least once visit the supplier physically or break it in to different parts of order. 5. If you have any doubt with particular supplier especially when there is difference in quality, you don't need to compromise there are lot of lawyers here in china who will help you out to solve this issue. If you need any assistance or need any help feel free to write to me at [email address removed]. Happy Trading.
The Wholesale Network website linked to in this article seems to be just a bunch of ads. Most sites listed there aren't even wholesalers. One tip: you can use coupon sites like This post was edited to remove a link. Please review our Community Best Practices for more information about how best to participate in our online discussions. Thank you. to find heavily discounted stuff to sell at retail if you can't find a wholesaler.
Make sure they have the Bussiness Bank Accoune, should use PayPal(buyer Protection) as the first payment, and search from Google and try to find any good or bad record about the supplier
I really prefer to buy in Thailand now, this is where I buy my stuff, for $20 "Personal Shopper Bangkok" (Google it) will go shopping for you (anything), cheap and good, I would love to find the same in Paris !!!

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