The Definitive Guide III: Finding and Working with Wholesalers

[Xanifur]

The Definitive Guide III: Finding and Working with Wholesalers

Disclaimer: This info is to the best of my knowledge, If you have other tips please share! I have personally been through this process, and I hope you learn something you can use in your future.

I would like to start out by saying there are two ways of finding wholesalers. Each of which I hope to explain to you in-depth. One way will yield you maximum income potential, the other will cut into your profit margins.

First, I cannot stress enough that I hope you all get legal with your retail business. It will bring you much more credibility and make your life easier and less expensive. Let's get started.

METHOD ONE:

There are two ways of finding wholesalers. One is through the search engines. I DO NOT RECOMMEND THIS METHOD! Please if possible stay away from the search engines when trying to find product. There are many companies out there trying to make you believe they are a wholesaler. Please understand that real wholesalers will not work with the public, they will only work with real businesses with a business license. These "Wholesalers" in the search engines are what we call "Middlemen" and often markup product prices and charge monthly fees. I would like to say it is possible to make money with them, but you will not make as much as if you were working with a real factory authorized wholesaler who do not charge these unnecessary fees. Margin is what you are looking for in any retail situation. The search engine is not the place to look for it.

METHOD TWO:

To find Factory authorized Wholesalers, contact the manufacturer of a product. Please note the label that is on a product is not necessarily the maker of the product. That is usually the brand name. You should look through the owners manual of the product you wish to sell and find the name of the manufacturer.

You can also use online services such as this:
http://www.consumerreports.org/cro/c...rs-a/index.htm

After you know the manufacturer, it's time to call them up. (Note: Manufactures will not work with you, or sell you product. Manufacturers do not have the infrastructure to work directly with retail businesses, this is the Factory Authorized Wholesalers job.) "Why are we calling the Manufacturer?" You ask. The manufacturer has a list of wholesalers they have authorized to ship their product to. This is the information we are after. A manufacturer should have no objection to this, and will usually tell you who they sell to.

After you get an answer, ask for their sales department. You will be transferred. You will be greeted. Say something along the lines of:

"Hello this is (Your Name) with (Your business name) I was calling to inquire about who your authorized wholesalers are, could you please tell me how to contact them?"

Again, they should have no trouble telling you.

NEXT STEP:

Calling the wholesaler. This is a very crucial part, and you must be very courteous to them. This is where you make it or break it, remember, you need them, they DO NOT need you. When you call, ask for the sales department. Say something along these lines:

"Hello this is (Your Name) with (Your business name) I was calling to inquire about becoming a dealer. Could you please tell me about your application process, and where to begin?"


It is very important to be professional. This includes stating your full name, and business name like above.

I have always been directed to their website where you will need to fill out an application form, but it is crucial to have all information ready, such as:

Bank references
Your bank name, address, Phone.
Your Business Checking account #
Your sellers permit #
Your information (i.e. Years in business, your address etc.)
Any trade references (if you have credit terms with other wholesalers)

Please note you may be asked for Trade References or a DUNS Number. This is for credit terms. Credit terms in a nutshell is ordering product from them, and paying at a later date. Many wholesalers have what are called Net 30, or Net 7 credit terms.

If you are a new home business owner you probably do not have have a DUNS # and Trade References. There is a way around this entire process.

If you do not have Trade references or a DUNS Number, simply tell the wholesaler you would not like credit terms, and would rather pay by check/credit card or debit card. This is 100% legitimate, and an easy way around a very lengthy process.

Please note: Some wholesalers may not accept personal credit cards or debit. Some may not even want to work with home based businesses, and may straight up tell you to get lost. Please don't get discouraged, and move to the next wholesaler on your list.

Also Note:

Some wholesalers have minimum orders, may range from $500-50,000 (See my signature for "Pre-Screened" Dropshippers and light bulk wholesalers)
Some wholesalers do not work with home based busineses.
Some wholesalers do not have fulfillment services (dropshipping)


I hope I cleared a few thing up. Thanks for the read! Good Luck!


PAST GUIDES:

The Definitive Guide: "Where do I find products to sell?
Everyones been asking. "Where do I find products to sell?"

The Definitive Guide II: Value Added
The Definitive Guide II: Value Added.

[Young Spark]

THIS ARTICLE WAS TOTALLY


[ADMIN EDIT]



GOOD!

I know you were probably thinking I was going to say something negative but really, you gave some great points for anybody who wants to be serious with their business. I'm not a know-it-all (as Sawkilla believes, but then again, its a honor to hear such a thing, maybe they as I said, don't take business serious) but this topic gave some great advice in my opinion.

Anyway, no negative comments or disputes... good *second* read. Thanks Xanifur.

[Scotch]

Sorry if I'm digging up this old post but it really should be pinned.

I have a few questions:

What type of company do the wholesalers prefer to work with? For example LTD, PLC, ect.

Does the documentation that you need to fill out ask for presonal details, for example DOB? Would they be put of if you were only 16 years old?

Would the wholesalers be happy to provide you with a list of the products they sell with information about each? Or do they expect you to know what product you want to sell in advance?

Cheers, Scotch.

[Xanifur]

Sorry if I'm digging up this old post but it really should be pinned.

I have a few questions:

What type of company do the wholesalers prefer to work with? For example LTD, PLC, ect.

Does the documentation that you need to fill out ask for presonal details, for example DOB? Would they be put of if you were only 16 years old?

Would the wholesalers be happy to provide you with a list of the products they sell with information about each? Or do they expect you to know what product you want to sell in advance?

Cheers, Scotch.

They really don't care what type of business you are. Whether you are a corporation or Sole Proprietor. I Am Registered under a DBA and have been accepted to every supplier so-far. All they really care about are sales.

They do need your SSN if you are a Sole Proprietor. They only care about your Business info, such as how long you have been in business, annual sales etc. I was 18 when I set up my accounts. As long as your are professional they shouldn't mind one bit.

All my suppliers have online catalogs you can go through, with full info on every product. They do not disclose price untill you have a business account with them as wholesale prices are not meant to be public knowledge. They will happily send you a catalog (online or print) for you to look at.

Good Luck!

[jgolla]

Great post, Xanifur. Thanks for the info.

jay

[Scotch]

Thanks Xanifur this is much appreciated.

Another question, you said "They only care about your Business info, such as how long you have been in business, annual sales etc", what if you are just starting up the business. For example you are registered legally and everything but you haven't much to show for sales, would that effect how willing they are to supply to you?

[Xanifur]

Another question, you said "They only care about your Business info, such as how long you have been in business, annual sales etc", what if you are just starting up the business. For example you are registered legally and everything but you haven't much to show for sales, would that effect how willing they are to supply to you?

That can be a potential problem. I was a new business too, but was still accepted for an account. When they ask for the # of years you have been in business on the application, you can just put down the year. If you started last week, instead of saying "1 week" simple put: "2007"

As for sales, just put down "N/A" or estimated sales, just make sure you tell them your numbers are estimated, and are not actual so you are not lying.

You absolutely do not want to lie to them, or over exaggerate... it will hurt you in the future.

[Scotch]

Haha, sneaky sneaky.
I'll probably just put N/A would seem more profssional than "ten" or something. :P

[jasaunders]

Many wholesalers will not sell to new companies and require one or more past invoices to verify you have done business in the past. The reason is, anyone can start a company for their own benefit and buy wholesale goods with no intention of being an actual retail store. Not everyone will require this, but over the past year of about 30 new vendors we have done business with, about 75% have requested past invoices (they usually request 2 invoices).

[Scotch]

Thanks Jasaunders.

If you were buying there product for personal use they would expect you to buy a low amount so would buying a number of the same product to start with persuade them?

[Xanifur]

Many wholesalers will not sell to new companies and require one or more past invoices to verify you have done business in the past. The reason is, anyone can start a company for their own benefit and buy wholesale goods with no intention of being an actual retail store. Not everyone will require this, but over the past year of about 30 new vendors we have done business with, about 75% have requested past invoices (they usually request 2 invoices).

This is true, but you can also let them know you are a new business. You are talking about trade references, and they usually do use it to verify that you have done business before. Many have contracts that you sign. When you submit an application, it clearly states that product is for resale only, not for personal use. Any infringement on this, or suspected infringement might lead you your account closure.

I've gotten accounts with no trade references. It wasn't a problem.

You also need trade references for credit terms (in most cases) If not, you will have to ask for credit later, after doing business with them for a while.

[jasaunders]

Thanks Jasaunders.

If you were buying there product for personal use they would expect you to buy a low amount so would buying a number of the same product to start with persuade them?

In my industry, which is retail scrapbook supplies, order size doesn't matter. Our typical orders are $500-$1000. It is pretty obvious it isn't for personal use; no one person would have a need for 25 pieces of the same piece of paper. And many of our vendors do not offer credit terms.

[copon85]

what web site do you find the manufacturers on?
thanks.

[Beems]

great information! so im also in the startup phase for retail apparel. are you familiar with this aspect of wholesalers? Do they have the same requirements when it comes to how long your business has been established? How do you go about getting invoices if you are making your intial purchases for the business? what does duns# mean? Thank you

[x339]

Pretty helpful guide. I have a list of wholesalers for multiple different niches and areas such as clothing, technology, etc.

If you want it PM me and I'll give it to you.