How to Locate Wholesale Suppliers
By Stephanie Chandler
When setting up a retail business, one of the most
daunting tasks can be locating and establishing accounts
with wholesale suppliers. But this process doesn’t have
to put a kink in your business plans. Here’s how to get
going.
Licensing
In order to purchase products at wholesale prices and
without paying sales tax, you will need to apply for a
resale license (in addition to a standard business
license). Holders of a resale license must collect and
report sales tax monthly or quarterly, depending on
local regulations. Contact your county business
licensing division to apply for your license. Vendors
may ask for a copy of the license or just your assigned
license number in order to comply with government
regulations, so be sure to keep this information handy.
Trade Shows
The best place to start looking for vendors is to attend
trade shows in your industry. Whether you want to sell
gifts, sporting goods, pet supplies, comic books, or
airplane parts, there is probably a trade show that can
accommodate your needs.
If you’re not already a member of a trade association in
your industry, you should be. Each association almost
always hosts its own trade show, or is at least
affiliated with relevant shows. The association
newsletter and website are also great sources for
discovering vendors.
If you aren’t aware of trade associations for your
industry, a quick Google search should help you locate
yours. For example, you can search for “sporting goods
association” and come up with a number of resources.
Within each website, there should be a list of
additional resources. You can also ask other business
owners in your field to suggest groups to join or check
out
http://groups.yahoo.com/ to locate business owners
and resources in your field.
The Trade Show News Network (www.tsnn.com)
provides a database of shows all over the world. Another
resource is
www.businessinfoguide.com/tradeshows.htm, which
lists business expos by state. Finally, be sure to check
the schedules of any large convention centers in your
area.
The Grass Roots Approach
Whether or not you are able to locate a trade show, you
are probably going to end up ordering supplies from a
lot of vendors so you want to begin researching your
options as soon as possible. Start by reading labels on
supplies you want to carry and get in touch with vendors
directly. Go out and find the products you want to carry
by visiting stores near you. Some vendors even provide
their website information on the product label. If the
contact information isn’t listed, a quick Google search
should help you locate the website or contact
information.
I faced this same challenge when I opened my bookstore.
Since I also carry gifts and greeting cards, whenever I
am out shopping and run into something I like for the
store, I buy one and get in touch with the vendor. Just
last month I contacted a vendor for a product I picked
up while in a gift shop in San Francisco.
Purchasing Terms
Once you locate a product you like, get in touch with
the vendor and ask about wholesale terms. Most companies
will allow you to order directly from them though you
can also ask if they use a distributor.
Many suppliers are going to require that you prepay for
awhile until you establish credit with them. Some
smaller vendors may be willing to negotiate and give you
30-day payment terms so be sure to ask what terms are
available. Also inquire about any added discounts for
pre-paying. Many will give you at least two extra
percentage points off for paying up front.
Return policies are another consideration. If the
products don't sell in six months, can you return them
or exchange them for different merchandise? Also ask
about minimum order amounts. I order books from a
distributor that costs slightly more only because they
don't have a minimum order amount. This way I don't have
to spend $500 at a time and can place a quick order for
$50 if I need to.
Know Who You Are Dealing With
The Better Business Bureau website (www.BBB.org)
is where you can find out about a vendor’s reputation
and whether any complaints have been filed against the
company. Unfortunately this is not a fool-proof research
strategy and if you are concerned about a potential
vendor, you should take some additional steps.
If you are making a large investment with a vendor, it
would be wise to visit their location in person. Since
this isn’t a viable option for many business owners, the
next best option is to call references. You have the
right to ask for references when considering a new
vendor. Be sure to follow through and ask each reference
how long they have been dealing with the supplier and if
they have experienced any problems.
I would be very wary about ordering supplies overseas
without first doing some research. There are plenty of
good ones out there, but you want to be especially
cautious since it will be more difficult to recover any
losses that you incur outside of the country.
It takes some time and work to build up your vendor list
so be patient. Try to get as much information as you can
from websites. Once you place orders with a few vendors,
you will end up on numerous mailing lists and soon you
will receive all kinds of catalogs. Be sure you start
the research process early on in your business planning
so you have enough time to locate the products you need
and build your budget accordingly.
Additional Resource:
http://www.wholesale411.com/ - A directory of
wholesale suppliers of all kinds of merchandise.
About the Author:
Stephanie
Chandler is a small business expert and the author of
FROM ENTREPRENEUR TO INFOPRENEUR: MAKE MONEY WITH BOOKS,
E-BOOKS AND INFORMATION PRODUCTS. She is the founder of
www.BusinessInfoGuide.com,
a directory of resources for entrepreneurs and
www.ProPublishingServices.com, a custom writing
business specializing in electronic newsletters,
information marketing, and sales copy for websites and
brochures.
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article can be reprinted in full provided the author
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