Wholesale Sourcing Tips

Why do you need a Wholesale Supplier?

If you’ve decided you want to develop your eBay business or any e-commerce business where you’re selling products, you’re going to need to find a wholesale supplier. A reputable and reliable supplier should be able to provide you with a volume of products at discounted prices, which you can then resell to make a profit, often with very healthy profit margins.

Deciding what to sell

Deciding what you are going to sell will help make your search for a wholesaler easier. It’s always best to decide on a product and then try and find a supplier, rather than just pick a wholesaler and try and sell what they are offering.

Click HERE To Claim Your 101 Guide to Product Sourcing and Selling on eBay FREE Report Now

 

What kind of supplier do you want to work with?

 

You need to decide what type of supplier you want to work with. There are essentially three types; wholesalers, drop shippers, and manufacturers and there are pros and cons with each of them.

Wholesalers

Wholesalers buy large quantities of goods from the manufacturers and then sell them off in bulk to businesses, who in turn sell the items individually.

There are pros and cons to using a wholesaler, and deciding if it’s the right choice for you will depend a lot on your situation.

Drop shippers

Drop shippers offer a unique twist to sourcing wholesale items. Instead of supplying the goods to you in bulk for you to sell to your customers, they will ship them directly to your customers.

Using drop shippers can be a great option when you’re starting out as it takes away some of the risks. A slight negative of using drop shippers is that you will make fewer margins on your sales as drop shippers usually offer lower discounts and need to cover the cost of shipping.

Manufacturers

Wholesalers and drop shippers work by buying large quantities of products from the manufacturer and then selling them on to traders. Once you’ve got some more experience dealing with suppliers and understand how the process works, there’s no reason why you can’t deal direct with the manufacturers in order to get even greater profit margins.

When dealing directly with manufacturers you will usually have to make a significant investment in stock, so the issues of working capital and storage come up again.

 

Finding reliable wholesalers, drop shippers and manufacturers

 

Once you’ve decided which kind of supplier you want to work with, you then need to find one that can provide a reliable supply of the products you want to sell. Of course the internet has made finding most things a lot easier, but there are still a few of ways you can go about finding your supplier.

The easiest way is to go to Google and search for “wholesalers” or “drop shippers”.

If you’re prepared to do a bit more work, a good way to find a reliable wholesaler is to actually get in touch with the manufacturer of the product you want to sell.

If you’re still unsure about dealing with a wholesaler, or are struggling to find a good drop shipper, there is a readily available source of wholesale products, which you’re already familiar with – eBay.

 

How to make sure your supplier is reliable

 

However you find your new supplier, once you’ve found them you need to make sure they are reliable. Whilst you can never be 100% certain until you start working with them, there are a few things you should do with any new wholesaler you are thinking of working with, especially when you are just starting out.

Basic checks

Check your supplier is a registered business - Most, if not all countries will require wholesale suppliers to be registered businesses.

Verify their website & e-mail details - Established wholesale suppliers should have a proper website and their e-mails should come from addresses related to this website.

Look for reviews and get references - The internet is great for finding suppliers, and it’s also great for finding out what their customers think about them.

Make sure their products are genuine - If you’re planning to sell branded items, particularly designer or high-priced products, you need to make sure that your wholesaler isn’t going to supply you with imitation or fake products.

Visit the supplier - If you’ve managed to find a local supplier you’ve got the benefit of being able to go and visit them.

Check their banking information - Ask the supplier to provide a reference for the bank that holds their business account (make sure it’s a business account and not a personal account) and contact the bank to confirm that the wholesaler is a trading customer.

 

Dealing with new suppliers

 

After you’ve done your checks and decided which wholesaler you are going to work with, there are a few things you can do to make sure you get the best out of the relationship.

Use the phone rather than e-mail - The internet makes it possible to find suppliers anywhere in the world and quickly and easily get in touch with them by e-mail.

Get samples or a small trial order - Before you place your first order with a new supplier, ask them for a sample or a small trial order.

Don’t be afraid to negotiate - Some people are natural hagglers and some people aren’t, but any wholesaler is going to be used to negotiating and it’s something you should be prepared to do. Don’t be afraid to ask for a lower price than you’ve been quoted.

Start small - If you think you’ve found a reliable supplier offering products with a good discount, there can be a temptation to jump in with both feet, after all, the more you sells the more money you will make, right? When you’re starting out, start small.

 

Other Considerations When Using a Wholesale Supplier

 

Register as a business - The first thing you want to do is to register as a business on eBay.

Tax - Now that you are planning to buy goods to resell, any profit you make is taxable. You will need to keep track of how much you are making and be prepared to declare it in your tax return.

Sales Tax - Depending on where you are based, you might need to add sales tax onto the items you are selling on eBay.

Import tax - If you are buying products from wholesalers in your own country, they should have dealt with all the taxes and duties for bringing the goods into the country, if they were manufactured abroad. However, if you are using a wholesaler or manufacturer in a different country, you will be responsible for paying any taxes, duties and fees for bringing the goods into the country.

Export permits for selling abroad - Some countries may require you to have an export license or permit for goods you are selling abroad – depending on what you are selling, where you are selling it, and what it is going to be used for.

Resale license - In the United States, if you are buying items from a wholesale supplier within the US which you are going to resell, you should get a Resale License.

Keep accurate records - When you’re running a business, you need to be professional and keep an accurate record of all your transactions.

Other regulations - depending on what you sell and where you sell it, there may be other regulations you have to comply with, or licenses and permits you have to obtain.