Even before deciding on a type of product to sell on your website, it's not a bad idea to understand how the wholesale supplier system works.
But here's what:
It's not a well-structured system at all. It's a large collection of random suppliers scattered all across the world. Some of them are great, while others not so much.
Not too long ago there were hardly any sites organizing lists of suppliers, making it difficult for retailers to locate the best ones.
Both in AliExpress and Alibaba, you can search to see what types of products are popular before making a decision on what to sell. In addition, it allows you to filter products, see what they look like, find pictures, and look for detailed supplier information.
Once you decide on a niche, it's time to see exactly what types of suppliers are available. Experienced ecommerce professionals will tell you the horror stories they've encountered with wholesale suppliers, so this is an extremely important topic to touch on.
Overall, you're trying to partner with reputable suppliers that deliver on time, provide a reliable contact, and give you some perks for working with them.
Some ecommerce stores can opt for the big suppliers in places like China, but sometimes a unique brand (like one that sells vintage clothing or furniture) would have to opt for a niche local supplier.
Regardless, your goal is to find the best of the best, and that's what we're going to talk about today.
Finding and Working With the Best Wholesale Suppliers
Your first step is to write down how you would like to fulfill your orders. Some companies try dropshipping, which means that the supplier takes care of everything including storage, packaging, and shipping to the customer.
Another option would be self-fulfillment or partial self-fulfillment, where your company stores the products in a warehouse and ships them out to the customers. This is far more expensive, but you maintain more control over the shipping process.
Finally, we have one of the most popular fulfillment methods available today, and that involves going with a third-party fulfillment company. The most relevant example of this would be Amazon fulfillment, where you can send all of the products to a company like Amazon and have them store and ship.
The reason it's so essential to decide on your fulfillment process first is that you need to understand if the suppliers are able to provide that type of fulfillment. For instance, many suppliers are more than happy to sell you products at wholesale prices and send them straight to your company. But it can be a little tricker locating suppliers that also have dropshipping offerings.
Therefore, we recommend keeping this in your mind at all times.
And now, I'll outline a step by step process that you can use to find and choose the best suppliers:
Contact the Suppliers First and Cut Out the Middle Men
Whether you contact a supplier through email or phone, the main goal is to get in touch with someone who's able to make decisions. The problem is that some industries have different types of distribution and supply systems. Therefore, you might find some middlemen in the process if you don't talk to the supplier first. In addition, the supplier should be honest with you in terms of which other companies are involved in the process.
If you're working directly with the supplier, this is the easiest way to cut down costs and make a bigger profit.
Another thing to consider is that suppliers aren't competitors with all suppliers. For instance, if you call a mobile phone case supplier and they say that your business is too small for them right now, you can always ask them for some recommendations.
They might even give you a full list of other reputable suppliers that service smaller brands. In return, you can give them some business after you've grown.
Make Sure That First Contact is Productive
You obviously want to establish a professional contact with the supplier company. However, it's not always as easy as you may think. Sometimes you speak to a different person everytime you give them a call.
Ideally, one or two people know you by name and remember certain details about your relationship. This not only expedites the conversation, but you're able to learn about the supplier more and trust them as the partnership grows.
Therefore, that first phone call needs to establish a contact with the company. If they can't provide you with that, it might be time to continue your search elsewhere. Sure, as your business talks get more serious you might get designated to speak with a different person in the future, but that first person is who you're looking to at the time being.
In addition, part of the productivity of that first call is getting a decent amount of information from them.
Your initial line should sound something like this:
“Hello, I'm launching a small <insert product type> store. I was wondering if I could get some information on your minimum order requirements and wholesale prices. Thanks!”
It's also essential to follow up with your emails or calls. Suppliers are busy companies with busy people. If you don't get a response, try again and keep your fingers crossed.
Ask for Samples
Not all suppliers provide samples, but it's becoming more and more common. This is particularly true for cheaper products. The reason you want a sample is that you should never start selling a product unless you've seen it, touched it, and tested it out.
This way you can even tell that to your customers and build some trust between you two.
Since there are so many suppliers out there, it makes sense to skip ones that don't give you samples.
Simply message them with this simple template:
“I like the way <product> looks online, but I was hoping to see a sample before we start selling. Would that be possible?”
If you're buying multiple products from the supplier, ask about receiving a batch with maybe 20 or 30 of the products. They may ask for some sort of payment, but most of the time it's only for the shipping. Then, as you test out the products and decide on the ones you like, you can continue to ask for samples until you test all of the products on your website.
Bargain for Better Prices
The only way to get a supplier to drop the price is to have some sort of bargaining chip or leverage. You can't request a discount just because you have a pulse.
Therefore, these are some things that you can use to bargain:
- Show that you can introduce the supplier to new markets.
- Reduce risk for the supplier.
- Consolidate your purchase orders.
- Try bundling different product types, as opposed to buying the same products in bulk.
- Mention prices offered by the competition.
- Ask about incentives besides price cuts.
Avoid Dropshipping Arrangements at the Start
Yes, the dropshipping bug seems to be sweeping the ecommerce world, but that doesn't mean it's good for every business.
In fact, we highly recommend avoiding it as a startup since it's tough to keep prices low and deliver the products on-time.
And here's why:
Most of the time you're dropshipping from a place like China. Therefore, the shipping is going to take a very long time and you don't have much control over that. In addition, smaller stores typically don't get better rates.
However, an established retailer (physical or online) has leverage in the bargaining process. These companies can expand their sales with dropshipping and typically won't have to pay too much. Also, the dropshipped products are only a portion of the inventory, so not every item is taking a long time to ship.
So first find a great supplier that also does dropshipping. You can set up a dropshipping agreement once you've begun to gain traction.
The Best Platforms to Find Suppliers for Your Online Store
Although we also recommend going to tradeshows and doing your own research on Google, these are the best spots online to find and partner with reputable suppliers.
Both AliExpress and Alibaba are owned by the same company, but AliExpress is more useful for small online retailers since you get wholesale prices, and most of the time you can buy any quantity you want.
If you are looking for Dropshipping wholesale suppliers, we suggest you start checking out
Visit our article Best Dropshipping Companies for an extended list and more info!
Are You Ready to Find the Best Wholesale Suppliers for Your Online Store?
Not every supplier is going to call you back or be nice to you, but many of them are highly professional and courteous. After all, every successful company began as a startup, and suppliers are always looking for the next big fish.
If you have any questions about how to find the best wholesale suppliers for your online store, drop us a line in the comments below. In addition, feel free to share your stories about working with suppliers, both good and bad.
Feature image by Tony Craig