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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:

There is a big difference between buying within the US and buying overseas, yet people have a tendency to treat buying overseas just like going to their local 7/11. Many sourcing portals, including big names have lists of suppliers including some with whom you would do business at your peril. Even suppliers identified as verified may not be all they seem to be. One big web portal has explained how they verify suppliers. All they do is check that they exist, and that they can be contacted. I never see suggested on any forum the names of several safe sites that I have sourced through for many years. The moral of the story is to first check out the sourcing portal. If it is US based have a look at BBB. Then check out the supplier, but beware, many suppliers in China trade under different names. On the other hand I know some very reputable Chinese companies that have several business names, and I would have no qualms about dealing with them. (This post was edited to remove a link. Please review our Community Best Practices http://www.sba.gov/community for more information about how best to participate in our online discussions. Thank you.)
Another good way to find reliable and authentic wholesale suppliers is to join any legitimate wholesale directory. Although there are many wholesale directories on net and it is really difficult to find the right one like for international trade daily trade, eBay, for UK Wholesale Pages, for Chine ali baba is very famous and trustworthy. Once you get it then all new ways open for you.
If you google, you can find supplier easily. Drop shippers too. It's not that hard actually
The wholesale business is probably a lot closer than many people realize. It all comes down to the relationships people make in their professional and personal career. It isn't often required to redesign the wheel but utilizing what is already in front of you.
It is very interesting to see nowadays manufacturers are wholesalers themselves, cutting out the middleman. It seems that since they cut the cost of the wholesale distributor the supplier, or the manufacturer can save money and so can the consumer. The online marketplace for wholesalers has become so well mapped that wholesale items are at your fingertips. Also, I would like to say the article is very well written, but I'm biased to the suggested wholesale directory. There are newer sources of wholesale wholesalers.
Even though Google has 64% of online search it's important to realize that a significant part of that traffic is people doing research before they buy. Yellow Page ads are still a vital part of small business advertising. The traffic is lower but when people turn to the Yellow pages they do so ready to buy.
SunCityFinancial is correct, I started my flea market business by finding the right supplier. The Internet is a good place to start but be careful, look for websites that are certified from the Better Business Bureau. Buying wholesale could really save you a lot.
I agree completely. It is going to be reciprocal but once you find the distributor, that relationship needs to continue to be worked and grown. Many decisions are still made by people and the stronger the relationship the more likely your supplier will be willing to compromise.
Thank you for the tips. I started an online retail business a few years ago. I quickly realized that suppliers will make or break you in a competitive environment. At first, I attempted to use a drop-shipping supplier, but found that their wholesale prices were not competitive enough. In my experience, finding the right supplier was the difference between success and failure.

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