Chapter 3

How to Navigate the Wholesale Business Like a Pro

wholesale business

After over eight years of working in the wholesale industry in one form or another, it’s fair to say I’ve learned a few tips, tricks, and ways of operating that will increase your likelihood of having a great experience.

Thinking of buying wholesale products. Working with drop shipping wholesalers, or dabbling in the infamous Chinese wholesale marketplace? Well, you don’t want to miss these tips!

And make sure you read to the end of the chapter as I share what I fondly call The Ten Commandments Of The Wholesale Business. But first, let’s go back to basics and get the foundations right: choosing the right wholesale products.

3.1 How to Select the Right Wholesale Products For Your Business

Now let me clarify, this part of the guide is not about how to choose a niche. What we’re going to look at is, how you mine through the plethora of wholesale products in order to find the perfect merchandise for your online store once you’ve identified your niche.

Finding the best wholesale products is all about research, but in my experience it also helps to have a criterion you can use to filter all suppliers you find through.

 1. Where are they based?

If you know you only want to work with a local wholesale business, then you can skip international wholesale suppliers straight off the bat.

2. What do the reviews say?

Source

Many wholesale sites don’t publish their reviews – especially if they’re bad. That doesn’t mean you can’t still find the skinny on them though, you just need to know where to look.

Three Places to See Business Reviews

Sure, it’s time consuming and boring – but I’m sure you can agree that an hour of detective work on the front end is worth a week of being down in the dumps because you were ripped off by a well-known scammy wholesale business.

wholesale product

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Expert Tip: It’s worth remembering that if you’re working with a Chinese wholesale business, you might struggle to find reviews for them online.

 

3. Do they have a MOQ (minimum order quantity)?

The wholesale business is built on working with customers who repeatedly buy in bulk. That’s why wholesalers online and at trade shows have a minimum order quantity to help pre-qualify those most likely to be a good fit.

That doesn’t mean that a high or out of range MOQ means you need to scrap working with them entirely. You do, however, need to be a bit more creative about how you approach them.

In Chapter 6, you’ll find my top tips on how to negotiate with your wholesale suppliers.

4. Do they have original photos?

Truthfully, that’s not always possible to tell – especially as you can’t do a reverse image search on Instagram. Even so, I’d still take one or two of the products you find on their site and run them through a reverse Google image search, as you’ll kill two birds with one stone.

Find out the following:

  1. Do the pictures belong to them?
  2. Who else is selling what they sell?

When it comes to finding wholesalers online and researching them, Google’s reverse image tool is your friend.

Related Content: Fighting Stolen Content On Instagram

5. Are They a Merchant Wholesaler?

I’ll keep this short and sweet.

You’re never going to be able to compete with the wholesale business that you buy your inventory from, especially if you’re a rookie. Check out the example I shared of merchant wholesaler Shein in Chapter 1.

Image from Ecommerce forum

With less experience, resources, and time at your disposal, you simply don’t have what it takes to go up against your wholesale supplier in the battle for the ecommerce checkout, and win.

Image from Ecommerce forum

Once you’ve found a few wholesale vendors which meet your requirements, it’s time to start drafting your initial outreach email and spreadsheet to organise all your data. More on that outreach email later, but first, let’s look at the sort of information you need to capture within your wholesale business database.

  1. Contact name
  2. Website name and url
  3. Company contact name
  4. Links to products you like
  5. Date your first name contact and any notes
  6. What day you will follow up

This adds another layer of work that some are reluctant to do. It’s worth the effort to keep your information organized from the get-go, because it’s important to establish relationships with your vendors.

 Expert Tip: Download my wholesaler email outreach template and spreadsheet.  

 

Okay, so once you’ve completed your research, I always find it helpful to do some some deeper due diligence, before diving into the email outreach phase. And there are five questions I always like to ask as I’m short listing vendors.

  1. Cost and value for money – do they offer a great product for a great price?
  2. Social responsibility – do they meet my ethical standards? (No child labour here, thanks!)
  3. Customer service – does this wholesale business care about me as a customer?
  4. Ease of transaction – is it easy for me to explain what I want and get it without too much friction, stress, or cost?
  5. How confident do I feel? Do I have enough information and security measures in place to feel confident in my supplier?

wholesale distributors

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Now obviously, you won’t be able to assess whether every wholesale business you find meet all these criteria until you’ve reached out to them. That said, it helps to know what to look for in advance.

Remember I said I was going to share ten tips? Here they are.

Wholesale Business Ten Commandments

  1. Thou shalt not only look at the first page results. They’re rarely the best.
  2. Thou shalt not judge a book by its cover. Sometimes great wholesale products are to be found on rubbish websites.
  3. Thou shalt be a savvy shopper. Window shop and compare prices, as you would with any other major purchase.
  4. Thou shalt do the math. Make sure you’re aware of all fees, shipping, labels, packing fees etc – not just costs of goods.
  5. Thou shalt ask the right questions. Have a list of everything you want to ask in advance.
  6. Thou shalt negotiate. Don’t be a cheapskate, though, and if you’re trying to push down the MOQ (minimum order) you may need to pay more.
  7. Thou shalt not waste people’s time. Know what you want, and keep your emails short and concise and to the point.
  8. Thou shalt adopt the ‘three strikes and you’re out’ rule. Your wholesale vendor is a crucial part of your business. If they keep mucking up, cut ‘em loose.
  9. Thou shalt always buy samples, especially if dropshipping, or ordering 10+ pieces.
  10. Thou shalt broaden your horizons. Buying overseas can be daunting, but there are killer deals to be found so don’t let that stop you.

Ready to move on to those email outreach tips? Great! Me too.

Related Content:

3.2 How To Reach Out To Any Wholesale Business Like A Pro

When you’re attending trade shows, you get the opportunity to meet the wholesale business owner or one of their employees in person.

But when you’re trying to find the best products, and you’re determined to find those wholesalers online, you can’t afford to be sloppy with your email outreach.

Think about it.

It’s the first interaction this business will have with you, so you really want to put your best foot forward and make a great impression.

Ryan Barr - Founder of WP Standard

Ryan Barr – Founder of WP Standard

Look for volume price breaks. Sure, get pricing first on their minimum order quantity, but expect to go big. What pricing could we get if we bought 1000 units? That way you’re thinking about long term profitability.

 

As a fellow entrepreneur I always try and put myself in the other person’s shoes when crafting my outreach email, as I know they’re likely to be busy and with little time to waste.

3.3 Wholesale Supplier Email Outreach Dos and Don’ts

Successful email outreach is all about doing your research and having systems in place to organise the information you acquire.

Below you’ll see a screenshot of the outreach template that I use, just click the link to get access to this spreadsheet and two email outreach templates you can steal.

Email Outreach Dos:

– Do (where possible) Find a Contact Name Of The Person You’re Emailing

“Dear Sharon” always comes across better than “Dear Sir/Madam”

Expert Tip: One of my favourite tools for finding named email contacts especially for US based business owners is Hunter.io.

 

If it’s not possible to find a first name – simply start by introducing yourself first.

Example: “Hi, it’s Stacey from (your company)”.

– Do Pay Attention To Your Email Subject Line

Make sure your email subject line makes it clear this is a business inquiry

Avoid vague subject lines like: ‘Hi’, or ‘inquiry’, and opt for headlines with a bit more urgency.

Example: “Sales inquiry about item (list number)”.

Sales teams are trained to look out for this type of email, so this level of specificity is likely to increase your email open rate.

– Do Keep Your Emails Brief and Grammatically Correct

We all make typos.

No doubt you’ll find a few in this ebook – but in your initial outreach email it really pays to try and come off as professional as possible.

When replying to you, many vendors will simply tell you to sign up on their website to create your vendor account. They may also remind you that you need your resellers permit.

But in this simple reply you’ve immediately learned two things:

  1. They require a permit – a legit wholesale business usually does
  2. They don’t totally suck when it comes to communication

– Do Let Them Know You’ll Follow Up

The average wholesale business receives obscene amounts of inquiry emails each day, which means the first hurdle you need to overcome is to get them to open your email. The next hurdle, is to get them to respond.

Sales team members are scanning emails quickly to see which inquiries seem genuine, and they also want to filter out tire kickers and time wasters. So letting them know you’ll follow up in 2-4 days if you don’t hear from them, demonstrates that you’re serious.

Email Outreach Don’ts:

– Don’t Write Loooonnnnnng Rambling Emails

No one enjoys receiving emails that read like a chapter of War and Peace. Facts!

What’s even less fun is a back and forth stream of one-line emails when one or two detailed emails would have done the trick. Be specific about what you want, but don’t ramble.

– Don’t Approach Like a Rookie

It’s not necessary to tell your wholesale supplier that you’re just starting out, as the average wholesale business owner is unlikely to prioritise what might end up as just a $100 sale.

Present yourself confidently and professionally from the very beginning, even when making initial sample purchases.

– Don’t Ask For a Discount With Your First Purchase

The goal at this point is really to establish your relationship with your wholesaler. Once your foot’s through the door and you’re making more frequent and larger purchases, then you can broach the topic of shipping discounts, lower prices, and split packs etc.

Okay, we’ve covered the dos and don’ts on how to do effective email outreach to your prefered wholesale business. But I need to drop a quick truth bomb: many wholesale suppliers won’t reply the first time.

Yep. That’s right!

You may reach out to 25 different wholesale businesses and only get a response from seven of them.That’s why the follow-up email is so important, and if you’ve ever done sales you’ll know exactly what I’m talking about.

Schedule in a reminder to follow up with any vendor who doesn’t reply within 3-4 days. This way, if they forget to get back to you, you’ll make sure you don’t slip through the cracks.

I use Boomerang to help me schedule follow up emails to people who don’t respond.

If your carefully crafted outreach email and subsequent follow-up gets no response, but you still really want to work with this wholesale business, the next step is to pick up the phone.

In a day and age, where everything is done by email,nothing says ‘I’m serious’ like picking up the phone.

That’s why I’ll share a list of questions to ask any wholesale business you’re interested in working with, as they help both parties work more efficiently.

Related Content: The Best Email Platforms For Ecommerce

3.4 11 Smart Questions To Ask Wholesale Suppliers

Below I’ve listed some questions that you should consider asking your wholesale vendor to ensure you have all the information you need to make a well informed buying decision.

  • Where are your products made and manufactured?
  • What are your delivery lead times?
  • Do you have a minimum order quantity (MOQ)?
  • How long have you been operational, and are you operational in Europe?
  • Do you work with overseas vendors?
  • Are your products available to the general buying public?
  • Can I buy samples before making a purchase order?
  • What quantities do your price breaks begin at?
  • Do you have a return policy for wholesale orders?
  • What are the delivery fees and shipping methods that you use?
  • What happens if my shipment turns up late?
 Expert Tip: You don’t want to send an email asking all these questions. That would definitely overwhelm the wholesaler.

 

Many wholesalers online will already have some of the information above available to the public. So make sure you check their website thoroughly, as you don’t want to ask questions they’ve already taken the time to answer.

Related Content: How To Check Out a Supplier Before Committing

3.5 Wholesale Shipping Costs and Shipping Carriers

There’s no two ways about it: finding a credible wholesale business to work with is no easy feat. And once you’ve found wholesale vendors you like who are willing to work with you, the next challenge you face is deciding on how you will ship the wholesale products that you bought for the best price possible.

Shipping and courier costs vary depending on your location. In this section of the guide, we’ll focus on some of the most popular wholesale shipping options available to you in North America, China, and the United Kingdom.

Let’s start with the different types of shipping options.

Regular Post

If coming from China this usually will be China or Hong Kong post, and you can expect it to take 2-6 weeks to arrive. This is the cheapest option, but it’s also the most time-consuming option.

There are some limited abilities to trace your package, but they are nowhere near as robust as with other methods. Although low cost, there are many risks associated with this type of post – and they are not always worth it.

The same applies for US regular post and UK regular post.

Express Courier

This is my prefered method, as it tends to be the best option for most people just starting out.

Yes, you will pay a little more, but when you’re just getting your business off the ground wouldn’t you rather spend more to have happy customers and less negative reviews?

Yeah, me too!

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Couriers offer faster delivery times and better online tracking with many having the ability to get your product to your customer within 2-7 days, know matter where they are around the globe.

All this speed and security does come with a higher postage cost though. That’s life.

Expert Tip: Different couriers offer different rates and weight breaks so don’t be afraid to shop around. And you can save time by setting your shipping accounts up in advance.

 

Air Freight

Some wholesale products are simply too big or going too far, and that’s where air freight comes into its own for getting your wholesale products delivered safely.

When working directly with the airline, air freight costs can be significantly cheaper than working with a middle man or courier. However, with air freight, there are tighter restrictions and deadlines you’ll need to adhere to.

Expect extra work when the goods arrive at your destination, as you alone are responsible for getting the paperwork correct to make sure your wholesale products clear customs.

This can be pretty overwhelming and challenging when you’re just starting out.

Sea Freight

This is one of my favourite shipping methods when shipping personal products from overseas. But I’ve found it doesn’t work that well when importing wholesale products – especially if you need your products to arrive in a timely manner.

Sea freight is a popular shipping method for many logistics companies and larger retailers, as they benefit from greater price breaks. But you need to remember products do take a significantly longer time to arrive, and if you’re a small or new brand having the ability to move and respond quickly is vitally important.

That being said, if you have the time, sea freight is nearly always the best option price-wise.

Depending on where you’re living, your sea freight wholesale product shipment can take anywhere between a week and two months, and you’re responsible for making sure your shipment clears customs.

ePacket Shipping

ePacket has become the shipping option of choice for ecommerce entrepreneurs, and you’ll find this shipping option is used extensively by those dropshipping from wholesale vendors based in China.

ePacket delivery was created to offer a viable alternative to the high cost of courier companies and the high risk of using the regular post.

This service has weight and size restrictions and isn’t perfect by any means, but it’s a shipping option you don’t want to overlook, especially in the early days.

epacket wholesale

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Expert Tip: Don’t forget you can only use ePacket to ship to your customers. Your wholesaler can’t use it to send you a wholesale shipment.

 

Each of the above shipping options come with pros and cons. Sometimes, you need to use a combination of these shipping methods to help you stock your new online store with the type and amount of inventory needed to offer a fully fleshed-out shopping experience to your customer.

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It’s also important to remember that your shipping costs are a crucial part of working out your full cost of goods.

While you want to keep these as low as possible, you don’t want to sacrifice offering a great product and a speedy service to your customers for the sake of a few dollars.

It’s also important that you realise many wholesalers themselves don’t have the correct wholesale licenses, as they’re not directly set up to export to foreign customers.

Image from Wholesale Forum

This is especially true in China. At one point, wholesalers there didn’t have a high demand from overseas customers, and many never bothered to get the right export license.

Should You Manage Your Wholesale Shipping Yourself Or Use An Agent?

This depends on:

  • Where you’re located in relation to where your product is
  • How much time you have to dedicate to sorting out paperwork and customs declarations

Using a wholesale shipping agent is going to save you a lot of time, stress, and oftentimes money. But on the flipside they are another expense which can end up stressing an already stretched budget.

The reason many retailers end up letting the wholesale supplier handle their shipping is because on the surface, it seems more simple, seamless and cost effective.

But in truth, if you isolate international shipping costs alone, you’ll often find working with the wholesaler’s shipper is more expensive than working with an independent agent or doing it yourself.

The wholesale business is like any other, and extra convenience does generally come at an additional cost, even if you don’t realise it.

Related Content:

3.6 How to Make Payments to Your Wholesale Supplier Safely

Sending large amounts of money over the internet can be even more nerve-wracking than writing a big check in-person.

But once you’ve found the right product, the right wholesale supplier and you’re ready to transact, well you need to know how to do that as safely and cheaply as possible. This is especially true when buying from China or other Southeast Asian countries.

Ryan Barr - Founder of WP Standard

Ryan Barr – Founder of WP Standard

Establish good terms up front. Knowing if they want net 30 or net 60, etc. will have dramatic implications for your cash flow.

 

How to Purchase Samples and Large Orders Safely

Where possible, use a service like PayPal over a wire transfer.

With PayPal you still have some recourse to your funds if something goes wrong, whereas with a wire transfer, consider it a sunk cost. Your money’s gone.

Most wholesale suppliers won’t tell you that they offer the option of paying by PayPal because wire transfer is their preferred method of payment. So if it’s not offered as a payment option, then don’t forget to ask.

 Expert Tip: Make at least one sample order by wire transfer, as it’s good to have the experience the process involved in authorising an international wire transfer. 

 

I work with a lot of wholesalers overseas, and my personal favourite service for doing international money transfers now is TransferWise.

They also offer a fair conversion rate, charge minimal fees, and payments are completed within just a few days.

Source

UK retailer?

Stay safe by looking for wholesale suppliers with TradePass certification.

It’s totally normal to be concerned about the legitimacy of the supplier information found on some of the many wholesale directories – especially those who regularly get poor reviews.

One thing I like about the UK-based wholesale directory, Esource.co.uk, is their TradePass certification. Wholesale suppliers are only given this verification stamp after going through an authentication and verification process.

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Read Your Contract and Make Sure You Understand it

Legitimate wholesale suppliers will have clear terms and conditions included within their account setup paperwork. Overcome your natural inclination to ignore them.

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There are a few fairly standard clauses which are in many wholesaler agreements, so let’s briefly review a few of them now.

Loss, Shipping, Transfer of Title

Get familiar with terms like FOB – Free on Board/Freight on board’, as wholesalers will frequently include them in their contractual terms and other formal communication.

The location and city listed will be the destination to which the wholesaler has agreed to pay shipping to. Shipping clauses may also cover your wholesale supplier to ship your order to you in parts. 

Payment, Payment Terms, Pricing

Pretty self explanatory, this section will contain details about your payment, agreed payments terms, and which methods of payment are acceptable.

This section may also include information about discounts for early payments, and fees for late payments.

I always double-check this section to make sure it correlates with what we’ve already agreed either verbally or by email, and you should too.

Warranty

Suppliers usually offer a guarantee that your product will be delivered as described,  or will being replaced or repaired should that not be the case. There will be processes and procedures to follow, but that’s to be expected.

That being said, just because a company has a refund policy doesn’t mean they have integrity and will honour it.

I found this out (again) with a recent wholesale purchase of shipping envelopes from a new vendor I was trying out. Check out this email thread between me and this supplier as I try to get a refund on a shipment of 300 items.

As you can see the wholesale supplier was telling me there was no recourse for a refund as ‘we have no such policies’. The strange thing is, their website says something quite different.

Image from wholesale supplier’s website

In this case, although I won my Paypal dispute, in order to process my refund Paypal told me to ship the faulty product back to India- despite the wholesale company having a policy around faulty products.

Here’s the thing though, weighing in at over 12 kg and too large for me to carry alone, it would have cost me more than the value of the merchandise to bare the return shipping cost myself. Ultimately, I had to cut my losses and charge it to the game.

Inspection and Rejection

This is the part of the contract that explains the timeframe you have to reject the merchandise delivered, and how to contract the supplier to discuss the shipment. When a supplier accepts a rejection you may be sent a RMA (return merchandise authorisation) reference.

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Force Majeure

The first time I saw this in a contract I had no clue what it meant. I’ve since learned it relieves both parties of any liability or obligation in the event of circumstances outside of your control – think war, riot, flooding, or an ‘act of God’.

Local Governing Law

Depending on where your wholesaler is based, they may be operating under a different set of laws than you.

In this section of the contract, your wholesaler will lay out its local law and legal responsibilities as they are applicable to your contract. This is include how fees will be paid by the losing party, should any litigation arise.

This clause should protect both parties, but the truth is it’s much harder to pursue any claim when you’re located in another country to your debtor. I’m still chasing up $16k owed to me by a US-based customer, since 2014.

 This is not an exhaustible list, and you should definitely take the time to review any contractual terms sent to you before you sign.

 

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