Suppliers
A supplier, also known as a merchant or a vendor, is anyone who either manufactures or sells a product or service to a customer or third party for resale. A supplier may also be the third parties, who themselves sell their products or services to another business for resale. A supplier can be the provider of the raw materials from the source, minerals, agricultural products, etc, but usually applies to a provider of a finished or processed product.
A supplier will be the first stage vendor of a product; a wholesaler or distributor will be a second stage merchant, selling numerous suppliers products to resellers, normally in a similar industry sector. Packagers of products who scale down large volumes of products to a saleable items are also suppliers and many of these allow for own label branding by smaller suppliers to sell as their own products.
Most suppliers will normally sell their products to a third party before the products reach the sale point to the consumer. Many larger suppliers do not sell direct to the consumers, but supply their products to importers, regional distributors, wholesalers, who then select the retailers and resellers for delivering the products to the consumers.
Types of Suppliers
There are 7 main types of suppliers:-
Manufacturers and Vendors – These are the companies that research, develop and actually produce the finished product ready for purchase. Manufacturers and vendors are the source of the supply chain. Distributors, wholesalers, resellers and retailers who purchase goods from manufacturers and vendors benefit from the cheapest prices because no other companies have added their margin to cost of the goods yet.
Wholesalers and Distributors – These suppliers are companies that buy in bulk from several manufacturers or vendors. They warehouse the goods for reselling to smaller local distributors, wholesalers and retailers. Distributors and wholesalers may also supply larger quantities to organisations or government departments directly. A genuine wholesale supplier will require your VAT or Tax ID number. This distinguishes them from discount retailers and resellers who market, particularly online, as wholesalers.
Affiliate Merchants – An affiliate merchant is a supplier that wishes to drive traffic to their website or sales of their product through banner ads and links placed throughout a network of affiliates. Merchants will normally pay affiliates a commission for every visit to the website or every sales conversion.
Franchisors – A franchisor is a business owner and will grant a licence to an individual, which allows them to develop their own business using the trademark, name, know-how and business systems of the franchisor which includes suppliers and often at better pricing than an individual could get themselves.
Importers and exporters – These suppliers will purchase products from manufacturers in one country and either export them to a distributor in a different country, or import them from an exporter into their country. Some may travel abroad to buy direct from suppliers in another country.
Independent crafts people – These are normally manufacturers of products they have designed or produced on smaller unique scales of economy and will usually sell direct to retailers or the end consumer through agents or trade shows.
Dropshippers – These are suppliers of products from single or multiple companies that will deliver direct to the buyer once they have made the purchase from your business. This can be cost effective as it eliminates the need for storage or display of the items for sale.
Each of these types of suppliers can be found operating globally and within all industries.
How to find suppliers
Before considering how to find suppliers you must identify your target market in terms of customers and the products that are most likely to meet your customers demand. Therefore spend some time researching the market, see what your successful competitors are doing and if possible speak to your customers and find out what they really want.
Suppliers for products in each industry will have many different ways of delivering the product to the consumer. You must fully understand each supplier’s distribution channels before you can find suppliers. In some circumstances the supplier may allow you to buy direct, others may require you to purchase further down the supply chain for example through an importer/exporter, distributor, wholesaler or retailer.
Finding and purchasing from suppliers such as manufacturers and vendors at the source of the supply chain will enable you to benefit from the cheapest prices because no other companies have added their margin yet. It is generally the case that the higher up the supply chain you purchase goods the better the price however in order to do so you may be required to have certifications, larger minimum orders and credit checks.
Once you’ve identified a product(s) to procure it’s time to think about how to find suppliers. Finding suppliers can be done the old fashioned way using the yellow pages, trade publications, magazines, the internet, search engines, business to business groups, industry specific groups, social media and now purpose built trade networks such as The Reseller Network.
Attending trade shows where suppliers exhibit who products relevant to your business will allow face to face contact with the suppliers. Trade shows take time and may involve travelling expenses; however you can network and establish good personal relationships with suppliers.
Ideally you want to aim to purchase your products from suppliers at source of the supply chain or as near to as possible. This may vary between industries but typically will be determined by accreditations, minimum order volumes and credit checks. To find out how and where you fit in the supply chain, first consider whether you are a distributor, wholesaler, reseller or retailer and then contact some suppliers above you in the supply chain.
Once you have found some potential suppliers contact them to find out how and what they can supply you with, consider product quality, price, availability and reliability. Make sure your suppliers can deliver the quantities of products that you are buying for your business at a shipping or delivery cost that remains competitive with alternatives.
Establish a good relationship with your suppliers and be persistent in ensuring they continue to offer good value. If new suppliers can offer better value or different products then be confident enough to research and contact new suppliers. It is also prudent to find alternative suppliers- in the event of a problem with your preferred suppliers.
What makes a good supplier?
Product quality, price, availability, reliability and customer service are all important factors in identifying a good supplier. A solid reputation is good indicator of this and the willingness to work with you to grow your business by selling more products to you. You can research reviews, feedback, references or testimonials, and company credit checks. Contact several different suppliers to decide on the most suitable for your business.
The location of the supplier may be important not only to keep shipping costs down but to be able to supply within the timeframe required. Consideration should be given to import and export requirements if the supplier is outside the country where the goods will be sold.
If you are a large customer of a small supplier you may get better service and discounts compared to being a small customer of a large supplier. A large supplier may be able to offer better discounts or financial terms in respect of loans and settlement terms and conditions.
A good supplier will be able to meet your customer service queries efficiently with a structured process through their chain of command. They will remain competitive on price with their rivals, deliver undamaged products, and provide training and information as required. They may be able to supply additional products as well reducing the need to work with numerous suppliers.
It is also necessary to consider their hours of business, their insurance and liability structure, and their returns or damage policy. It is good to know who your other suppliers could be so that if needed you may purchase from them if your chosen supplier is unable to deliver for some reason.
The ethics and legal compliance of the supplier will need to meet the requirements of your customers. This will ensure you are working with a supplier who has a high level of integrity, and that you can trust. Good suppliers will be compliant with regulations and systems.
A good supplier will communicate effectively with their partners to benefit both businesses. Goods supplied may have expiry dates or limited sale times and it is important they can be sold before the product is out of date. Ensure that your supplier offers genuine product and not illegal or cheaper imitations which are attractive in price but not the real product.
Many suppliers will find it very beneficial to seek accreditation from various regulating bodies and those who meet the criteria will quickly ensure you are aware of their achievements.
How to get the best rates from suppliers
Suppliers are in business to make money so they may not simply offer you their best prices immediately. In order to get the best prices from your suppliers you should bear these tips in mind;
Shop around – do your research and compare prices with several suppliers, this will give you a good idea of what is a fair price.
Negotiate – speak to suppliers and ask them if they can offer you a better deal. If you see it cheaper else where ask your preferred supplier if they can match or beat that price.
Increase sales/order volumes – the more you order or buy from your supplier the more value they will see in retaining your business and therefore they will be more inclined to offer you better pricing.
Pay on time – If you do not pay your suppliers in a timely fashion as per your agreed terms they will not feel inclined to help you by offering better pricing and may even choose to stop supplying you.
Maintain a good relationship – Talk to your suppliers on a regular basis, if they like you and you build a long term relationship that is mutually beneficial they will be more willing to offer you a better deal.
Starting a wholesale business
Starting a wholesale business could be a lot easier and cheaper than you think! There are several different types of wholesale business that you could start. Some wholesale businesses do require a physical premise and stock, however some wholesale businesses can be run entirely over the internet without out pre-purchasing stock. This means you could start a wholesale business quickly, easily and with little or no capital investment.
Whether you want to start a wholesale business as a full time business or part time as a secondary source of income you will need to plan your business to be successful! This article will give you a basic overview of some considerations to get you started.
Choose the type of wholesale business you want to start
In simple terms a wholesaler usually purchases stock at very low prices because they order in large volumes. Wholesalers then resell stock at wholesale prices to resellers, retailers, distributors and other wholesalers with their margin added to the cost price to make a healthy profit. There are actually 7 types of wholesale businesses that you could start so first you need to identify which type of wholesale business is right for you.
Indentify the industry you wish to start your wholesale business in
It’s generally advantageous to have knowledge of the industry before starting a wholesale business and although not essential it’s much easier to get started if you know the products, manufacturers, and retailers that you’ll be working with. If you are considering starting a wholesale business in a new industry you should research industries of interest and contact potential suppliers for product information, terms and pricing. Ideally you should look to sell products that you feel passionate about and believe in, within a market that is not over saturated and too competitive.
Indentify the market your wholesale business will supply
Once you’ve decided which type of wholesale business you want to start, the industry you wish to start up in, you’ve researched some potential products and suppliers, you now need to consider who you will sell to. Who will be your customers? Where will they be located geographically? Will you need to ship goods to them or will you operate on a drop ship basis with your suppliers? If you have to ship goods how much will it cost you! How will you promote your business to get customers to buy from you? Traditional marketing mediums such as email, magazines, post, trade shows, pay per click etc are costly and much less effective these days!
Check out the wholesalers your new business would compete with
The less competition your new wholesale business has the more profit you will make! Suppliers will not allow too many wholesalers to trade in any given territory as this can start to a price war and ultimately commercial suicide for all businesses concerned when there is no more profit left in the price of the products! How much do your competitors charge? How much will you charge? How much profit margin can you realistically add to the cost of the products while remaining profitable and competitive? Apart from price how will you differentiate your new wholesale business from that of your competitors? Will you add value by offering additional products & services or do you plan to compete solely on price?
Check your new wholesale business is viable
So you know what type of wholesale business you want to start, you’ve researched and spoken to suppliers, you know how much it will cost to purchase stock, you know who you will sell it too and how much you will sell it for and the cost of shipping the goods so now all you need to do is some basic calculations to check that your business is viable. Keep it fairly simple, use a spreadsheet if possible to show the costs and estimated sales revenue, deduct your total costs from total sales to work out your potential profit. It pays to be conservative but play around and compare best case vs worst case scenarios. If you need capital for stock, premises, staff etc you may need to raise finance which can be tricky especially without a robust business plan but with the added risk you need to sure you are making a the right choice!
Starting up your new wholesale business
If you’ve done your home work and are confident that you are ready to start a wholesale business you need to incorporate a company. Incorporating a company can be done quickly and easily online and is very cheap. Whether you are going to be an online wholesaler or have a physical premise to trade from, once you’ve incorporated your new wholesale business you’ll also need a domain and a website. Registering a domain can be done online quickly, easily and cheaply. Depending on what you need you can even get a free website able to take payment and process orders online. Next you need to talk your suppliers and if applicable order stock and get your products on your website. As soon as it’s all tested and working it’s time to start your new wholesale business and start selling!!
Starting a reseller business
Starting a reseller business could be a lot easier and cheaper than you think! There are many types of reseller business that you could start. Some reseller businesses require a physical premise and stock, however some reseller businesses can be run entirely over the internet without out pre-purchasing stock. This means you could start a reseller business quickly, easily and with little or no capital investment.
Whether you want to start a reseller business as a full time business or part time as a secondary source of income you will need to plan your business to be successful! This article will give you a basic overview of some considerations to get you started.
Choose the type of reseller business you want to start
In simple terms a reseller is simply resells the good or services of another company. There are many types of reseller businesses that you could start so first you need to identify which type of reseller business is right for you. Resellers may purchase stock from suppliers at trade prices and then resell with their profit margin added on top or sometimes resellers refer sales to suppliers in return for commissions. Either way can be just as financially rewarding and the route you choose will mostly depend on which industry you wish to start your reseller business in and also whether you have capital behind you.
Indentify the industry you wish to start your reseller business in
It’s generally advantageous to have knowledge of the industry before starting a reseller business and although not essential particularly if you refer sales to suppliers. However it’s much easier to get started if you know the products, manufacturers, and resellers that you’ll be working with. If you are considering starting a reseller business in a new industry you should research industries of interest and contact potential suppliers for product information, terms and pricing. Ideally you should look to sell products that you feel passionate about and believe in, within a market that is not over saturated and too competitive.
Indentify the market your reseller business will supply
Once you’ve decided which type of reseller business you want to start, the industry you wish to start up in, you’ve researched some potential products and suppliers, you now need to consider who you will sell to. Who will be your customers? Where will they be located geographically? Will you need to ship goods to them or will you operate on a drop ship or referral basis with your suppliers? If you have to ship goods how much will it cost you! How will you promote your business to get customers to buy from you? Traditional marketing mediums such as email, magazines, post, trade shows, pay per click etc are costly and much less effective these days!
Check out the resellers your new business would compete with
The less competition your new reseller business has the more profit you will make! Suppliers will often not allow too many resellers to trade in any given territory as this can start to a price war and is ultimately commercial suicide for all businesses concerned when there is no more profit left in the price of the products! How much do your competitors charge? How much will you charge? How much profit margin can you realistically add to the cost of the products while remaining profitable and competitive? Apart from price how will you differentiate your new reseller business from that of your competitors? Will you add value by offering additional products & services or do you plan to compete solely on price?
Check your new reseller business is viable
So you know what type of reseller business you want to start, you’ve researched and spoken to suppliers, you know how much it will cost to purchase stock, you know who you will sell it too and how much you will sell it for and the cost of shipping the goods so now all you need to do is some basic calculations to check that your business is viable. Keep it fairly simple, use a spreadsheet if possible to show the costs and estimated sales revenue, deduct your total costs from total sales to work out your potential profit. It pays to be conservative but play around and compare best case vs worst case scenarios. If you need capital for stock, premises, staff etc you may need to raise finance which can be tricky especially without a robust business plan but with the added risk you need to sure you are making a the right choice!
Starting up your new reseller business
If you’ve done your home work and are confident that you are ready to start a reseller business you need to incorporate a company. Incorporating a company can be done quickly and easily online and is very cheap. Whether you are going to be an online reseller or have a physical premise to trade from, once you’ve incorporated your new reseller business you’ll also need a domain and a website. Registering a domain can be done online quickly, easily and cheaply. Depending on what you need you can even get a free website able to take payment and process orders online. Next you need to talk your suppliers and if applicable order stock and get your products on your website. As soon as it’s all tested and working it’s time to start your new reseller business and start selling!!
Starting a retail business
Starting a retail business could be a lot easier and cheaper than you think! There are several different types of retail business that you could start. Some retail businesses do require a physical premise and stock, however some retail businesses can be run entirely over the internet without out pre-purchasing stock. This means you could start a retail business quickly, easily and with little or no capital investment.
Whether you want to start a retail business as a full time business or part time as a secondary source of income you will need to plan your business to be successful! This article will give you a basic overview of some considerations to get you started.
Choose the type of retail business you want to start
In simple terms a retailer usually purchases stock from suppliers at trade prices because they order in trade volumes rather than purchasing individual items here and there. Retailers then resell stock to the end consumer with their margin added to the cost price to make a healthy profit. There are actually 7 types of retail businesses that you could start so first you need to identify which type of retail business is right for you.
Indentify the industry you wish to start your retail business in
It’s generally advantageous to have knowledge of the industry before starting a retail business and although not essential it’s much easier to get started if you know the products, manufacturers, and retailers that you’ll be working with. If you are considering starting a retail business in a new industry you should research industries of interest and contact potential suppliers for product information, terms and pricing. Ideally you should look to sell products that you feel passionate about and believe in, within a market that is not over saturated and too competitive.
Indentify the market your retail business will supply
Once you’ve decided which type of retail business you want to start, the industry you wish to start up in, you’ve researched some potential products and suppliers, you now need to consider who you will sell to. Who will be your customers? Where will they be located geographically? Will you need to ship goods to them or will you operate on a drop ship basis with your suppliers? If you have to ship goods how much will it cost you! How will you promote your business to get customers to buy from you? Traditional marketing mediums such as email, magazines, post, trade shows, pay per click etc are costly and much less effective these days!
Check out the retailers your new business would compete with
The less competition your new retail business has the more profit you will make! Suppliers will not allow too many retailers to trade in any given territory as this can start to a price war and is ultimately commercial suicide for all businesses concerned when there is no more profit left in the price of the products! How much do your competitors charge? How much will you charge? How much profit margin can you realistically add to the cost of the products while remaining profitable and competitive? Apart from price how will you differentiate your new retail business from that of your competitors? Will you add value by offering additional products & services or do you plan to compete solely on price?
Check your new retail business is viable
So you know what type of retail business you want to start, you’ve researched and spoken to suppliers, you know how much it will cost to purchase stock, you know who you will sell it too and how much you will sell it for and the cost of shipping the goods so now all you need to do is some basic calculations to check that your business is viable. Keep it fairly simple, use a spreadsheet if possible to show the costs and estimated sales revenue, deduct your total costs from total sales to work out your potential profit. It pays to be conservative but play around and compare best case vs worst case scenarios. If you need capital for stock, premises, staff etc you may need to raise finance which can be tricky especially without a robust business plan but with the added risk you need to sure you are making a the right choice!
Starting up your new retail business
If you’ve done your home work and are confident that you are ready to start a retail business you need to incorporate a company. Incorporating a company can be done quickly and easily online and is very cheap. Whether you are going to be an online retailer or have a physical premise to trade from, once you’ve incorporated your new retail business you’ll also need a domain and a website. Registering a domain can be done online quickly, easily and cheaply. Depending on what you need you can even get a free website able to take payment and process orders online. Next you need to talk your suppliers and if applicable order stock and get your products on your website. As soon as it’s all tested and working it’s time to start your new retail business and start selling!!