How to select the best wholesale supplier

How to Select the Best Wholesale Supplier

Copyright (c) 2009 Steven Holmes

As a retailer I’m often approached by new wholesale, hoping to wrestle my custom away from my existing suppliers. Promises of huge discounts, ever-changing product ranges and a far superior level of service to the one provided by my long-standing wholesaler. The problem is that in the early days of my retail career, when margins were the only thing I cared about, I was seduced by these promises and changed my supplier on a number of occasions, invariably to be disappointed each time. This taught me a valuable lesson — once you’ve found a reliable supplier who provides you with the correct goods, on time, and with a level of customer service that isn’t offensive, stick with them unless you’re absolutely certain that someone can do better.

Of course the number of wholesalers you have to choose from varies greatly from product to product so you may have your mind made up for you. If not though, the key considerations you should bare in mind are as follows:

Reputation — Don’t be afraid to ask other people, even if they are the competition. Try to get the opinion of at least one person who has worked with the supplier before. If the reaction is positive then at least you have a first-hand referral. If a supplier has a reputation for being bad just avoid them. Your shop’s success relies on a continuous flow of stock, so anything that gets in the way of this could be damaging. It’s vert easy to be tempted into using a supplier with a bad reputation because they have the lowest prices. You will regret it!

Language — The way the retail industry is now, a huge number of wholesalers/suppliers are based overseas. Ensure that any overseas supplier you use has a member of staff who is a fluent speaker of your language, unless you happen to be a fluent speaker of there’s. It is vitally important that you can communicate clearly with your suppliers

Payment Terms — Choose a supplier whose payment terms fit with the finances of your business. Very few suppliers these days will ask for the full amount up front but if they do, and to do so would stretch you financially, walk away. Instead choose a wholesaler who operates a sale-or-return policy or a credit policy. This will give you enough time to generate the funds needed to pay for the stock, without putting your business at risk.

Product Range — Differentiation is absolutely critical in retail. If you sell products that are different to the competition then you can sell them at a higher price because of exclusivity. If your products are the same as everyone else’s then the shop with the cheapest prices will get the sale. If possible, find a wholesaler who offers a wide range of original products that are exclusive to them only. For example, if you’re in the market for a wholesale costume jewellery or wholesale fashion jewellery supplier, you will probably find that a number of wholesalers in India or the Far East stock exactly the same products. In this situation it would be advisable to go direct to the manufacturers.

Price — Of course price is an important element. If you can’t make a decent margin on the products you sell, your business will fail. The reason, however, that I have left price til last is because, in my opinion, it shouldn’t be your primary focus.