By Lilit Broyan
While talking about retail or e-commerce business, one of the key moments in the life of a beginner entrepreneur is finding suppliers to purchase wholesale from.
In the world of the World Wide Web, it is quite easy to find a supplier for any product that comes to your mind. However, what is tough is finding the right supplier you can trust. If you fail selecting good suppliers in the beginning, your business growth will be at risk.
The post is going to present several useful tips on sourcing suppliers for your small business and how to work with them.
Domestic vs Overseas Suppliers
Before getting started, you need to identify whether you want to work with domestic or overseas suppliers.
When you choose domestic sourcing, lots of processes will be quite easy and fast, including the communication with suppliers. You will be able to get quick samples and identify reputable suppliers. Furthermore, you will be able to cut down on the shipping costs and time. One of the cons of domestic sourcing is that you will have limited choices and higher manufacturing costs.
International sourcing has its pros and cons as well. The most common oversea suppliers that most businesses choose are located in the Asian countries like China, India and Taiwan. Compared to domestic suppliers, international suppliers offer a greater variability for products with lower costs. Even though they are much easier to find, communication, language and timezone are the main disadvantages of this option. You should also expect an increase in the budget for product transportation.
Ultimately, there is not a right answer on which option is the best or the most recommended. At the end of the day, it is the business owner who should assess business needs and set goals before making a decision. Also, the specifics of your business should be taken into account. Are you going to sell products that are time sensitive? Are your customers pocket sensitive and will a slight change in the price affect their decision? Think about it.
Types of Suppliers
Another choice to consider is the supplier category. There are 4 types of suppliers:
Manufacturers – These are the owners of factories who produce the product. This option will give you a better control over the products and lower costs.
Distributors – These types of suppliers buy wholesale from different manufacturers and warehouse the products locally or overseas in order to resell to smaller distributors or wholesalers. Even though this is a more expensive option, it offers much easier communication than direct manufacturers.
Importers – This category of suppliers purchase their materials from one country, and then sell those same materials in a different country. These are more like a domestic wholesaler.
Dropshippers – This option is usually considered by owners of online shops. When you choose these suppliers, they will deliver the product to your buyer directly. It will cut down the storage costs.
When you are in search for the right supplier for your business, it is really about taking a look at what the business needs, and the goals you have, and which supplier type corresponds most closely to those needs.
How to Find Suppliers
Now that you have a better understanding of supplier types and maybe decided what option align with your business needs the best, you wonder how you can start your search. I suggest a few options that might help:
1. Find Suppliers on the Web
You can make the use of Google or other major search engines. Start exploring different keywords such as “vendor,” “wholesale,” or “supplier” in combination with your desired product name, such as “wholesale clothing”.
Note that higher rankings do not guarantee better options. Some experienced and trustworthy suppliers do not have a proper web presence and have not kept up with search engine algorithms, so consider other options as well.
2. Explore Directories of Manufacturers
You will be surprised to find hundreds of verified manufacturers, vendors, wholesalers or other suppliers in such online directories. Most of them are free and easy to use.
Some of the popular directories are ThomasNest (USA), Top Ten Wholesale (USA), Esources (UK). As for the overseas directories, you can explore Alibaba, Aliexpress, Indiamart, Chinabrands, etc.
3. Attend Local or Overseas Trade Shows
Attending trade shows both in your country and overseas is still relevant. Meeting your prospective partners face-to-face and agreeing to deals at the trade show will cut down the back and forth communication via email or phone calls.
I recommend to check out Trade Show News Network which is the largest directory of trade shows online.
4. Join Industry Forums, Groups and Other Discussion
Last but not least, joining offline or online communities sharing the same interest is highly recommended. You might meet small business owners who can make recommendations, connect you with relevant groups or simply share their experience.
As for online communities, through my research I found plenty of online groups on Facebook and Linkedin. There are also relevant subreddits on Reddit.
How to Identify the Best Suppliers
Now that you know how to find suppliers, you will need to shortlist them. So what criteria should your shortlisting be based on? How to spot the best suppliers aligning to your business needs?
1. Get Started by Requesting Quotes
Requesting a quote is free. Send the supplier your desired products, quantity and your location. They will review your request and come up with their proposal.
In addition to their basic quote questionnaire, make sure the supplier gives you information on:
- Minimum Order Quantity (MOQ)
- Product samples
- Unit prices
- Payment options and terms
- Shipment Options
2. Ensure Supplier Certification
If you use a directory such as Alibaba, make sure the supplier has a good rating and positive reviews and is eligible and approved to conduct business and provide services.
Before you start, I want you to know that finding the right supplier is a tough process. And this task should not just be done for a check mark. You will build your whole business process based on this initial step so make sure you invest enough time and effort to identify the best supplier for your business.