Choosing The Right Wholesale Supplier – 6 Top Tips
For retailers, both high street and online, choosing the right supplier or suppliers can be the making or breaking of your business. Choose well and you’re laughing but choose badly and any number of problems can ensue.
Over the years we have worked with thousands of retailers and in this time we have heard pretty much every horror story going, some of which have seen small businesses on the verge of bankruptcy.
So, armed with that knowledge here are our top tips for choosing a supplier that will help your business to flourish:
1. See the whites of their eyes
We live in a digital age where many of our daily transactions and interactions are done online – highly convenient but essentially faceless. While this anonymity is perfectly acceptable for some areas of business, there are others where the old ways are still the best and choosing your suppliers is one of them.
We are big advocates of trade shows. They allow us to meet potential customers and show them the quality and exclusivity of our products, take orders and gather feedback about our collections. They also give retailers the chance to meet us, see if our prices fit with their business model and ultimately decide if we are a company they would like to work with. This face-to-face interaction is a key part of our business and we wouldn’t be where we are now without it.
Find a supplier you can build a relationship with and ideally sit over the table from. Business has been done in this way for thousands of years for a reason – it builds trust and reassures both parties. It also gives you a chance to touch, feel and experience first-hand the products you might end up stocking and there’s no substitute for that.
2. Don’t put all your eggs in one basket
Unfortunately, like the retailers they supply, smaller wholesalers can go out of business. All it takes is for one big customer to go bust with unpaid invoices still in-hand and the resulting loss in revenue can have a catastrophic knock on effect for the supplier. For the other customers who rely solely on that supplier for their stock it’s the worst case scenario.
Most retailers we work with have one main supplier and 1-2 additional suppliers for certain ranges, and by spreading the load they minimize their risk.
If you do prefer to use one supplier for all of your stock, choose a larger, well-established wholesaler that has been in business for a number of years. The likelihood is that they have the financial clout to withstand the sort of scenario mentioned above.
3. The Cheapest option is often not the best option
In the early stages of any business watching the pennies is paramount. In most cases you won’t have a bottomless pot of capital so prudent spending is the name of the game. However, opting for the cheapest option is not always the best option. There are a vast number of overseas suppliers hawking their wares online and there’s no doubt they present a very attractive option. However, what you save on purchase prices you could end up paying for in stock damaged in transit, delayed shipments, shipping costs and in the worst case scenario bogus offerings. Unfortunately we’ve seen examples of all of these and not just once.
Another point to consider is compliance of goods to the requisite EU standards or US standards, depending on where you’re based. Trading Standards carry out random compliance checks on goods being imported and any shipments that are non-compliant, regardless of size, will be seized and can land the importer with a significant fine or in some cases a jail sentence.
Reputable suppliers should be able to provide you with certificates to prove that their products are compliant with the requisite standards which removes any such danger for the purchaser.
When your business is more established you afford to take more risks but doing so at the get-go may stop you in your tracks before you’ve even begun selling.
4. Find out what else your supplier can do for you
Wholesalers have experience of working with any number of retailers and will have seen both successes and failures. Tapping into this knowledgebase could provide some valuable insights into your potential audiences as well as some ideas that could help your business to thrive eg. product merchandising options, marketing ideas, mutually-beneficial alliances etc.
While some suppliers will only sell and ship products, others may be able to provide you with own-label packaging and bespoke display units to enhance your retail experience.
If you need help in certain areas don’t be afraid to ask your supplier. If they cannot help they will almost certainly be able to put you in contact with someone who can.
5. Get references from existing customers
Don’t feel cheeky to ask for references. This is business and no matter how good your rapport is with a potential supplier, a first-hand account from an existing customer or two can provide invaluable reassurance.
6. Make sure faulty returns don’t come off your bottom line
Ensure that your supplier accepts all faulty returns and will compensate you accordingly, otherwise it can eat into YOUR profits. Most reputable wholesalers will have such a policy but it’s best to make sure rather than assuming.
Although one or two returns won’t have a significant financial impact, a faulty batch of products could leave you seriously out of pocket.