In business, and particularly in retail, finding the right wholesale distributor can make a big difference. Wholesale distributors work closely with manufacturers to purchase large amounts of goods. These goods are then resold to retailers who sell the goods to customers. The term “wholesale prices” refers to the discount that is gained from buying from a wholesale distributor. The retailer adds its own markup when selling to customers, but the purchase price for the retailer is often significantly lower. If you want to take advantage of a partnership with a wholesale distributor, below are several tips to help you find one that can provide the solutions your retail organization needs:
Look For A Distributor Willing To Negotiate
Wholesale distribution relies on negotiation as a matter of course, so you should never be afraid to try your hand at negotiating with wholesale distributors. The distributor has probably already negotiated a deal with the manufacturer, and the discount the distributor receives is often based on order volume and the number of distribution channels available. If your retail organization has something to offer the distributor, use this to your advantage and negotiate.
Search Online Marketplaces
The Internet has changed the face of wholesale distribution and retail. These days, many retailers work directly through distribution channels that have a heavy online presence as low overhead allows these distributors to provide great deals. eBay, Alibaba and others can be fantastic sources to check out if you’re looking for a wholesale distributor that uses the Internet as its primary showcase and support channel. There are also online directories of distributors that specialize in certain goods, so if you’re looking for niche products, these might be your best bet on the Internet.
Look For Local Distributors
Distributor relationships often involve long distances. According to the very nature of what a distributor does, it’s beneficial to have access to a distributor that can source goods from manufacturers all over. As much of an advantage as this provides, however, you may consider looking for a local distributor instead. A local wholesale distributor may be able to provide goods faster, and because your retail organization is local to the area, you may have an easier time negotiating a discount since the distributor will likely have to spend less time and money on travel and transportation.
Get Quotes From Multiple Distributors
When looking for the right distribution partner, consider interviewing several candidates that fit your needs. Much like with any other type of business partnership, you need to know that you’re working with a distribution partner that fits your company’s needs and understands your challenges. While there may be a number of wholesale distributors that can get you the products you need at a price that works for your company, there are other elements that go into a business partnership that can be less tangible in nature. You want to look for these items in addition to looking at a distributor’s abilities.
Find A Wholesale Distributor That Only Handles Distribution
Something else to consider when looking for a whole distributor is whether the distributor also maintains a retail channel. This can become a problem for your business since a distributor that also sells to retail can become a source of competition. This situation may also cause a conflict of interest for the distributor when it comes to pricing, putting your business in a position where you have less negotiating power.
If a potential distribution partner has a retail arm, this isn’t an immediate disqualifier, but it should give you a reason to look more thoroughly at what your retail organization stands to gain and what it stands to lose. You might also consider having a distributor sign a non-compete contract to limit the distributor’s ability to sell to the public.
