For ecommerce businesses, having access to a large volume of inventory can be beneficial. That’s why some ecommerce stores have chosen to rely on a wholesale distributor to ensure they have plenty of inventory on hand.
If you’re considering working with a wholesale distributor, here’s what you need to know.
What is a wholesale distributor?
A wholesale distributor (aka wholesaler) buys large quantities of goods directly from manufacturers and resells them to retailers and ecommerce businesses.
5 ways that wholesale distributors can help ecommerce businesses
Wholesaler businesses traditionally work with brick-and-mortar retailers, but are starting to work more with small businesses like ecommerce merchants because of how quickly ecommerce is growing. Here are some of the ways wholesale distributors and wholesale suppliers can benefit your ecommerce business.
1. Consistent access to products
Wholesale distributors get discounts from suppliers for purchasing in bulk. You can worry less about running low on inventory since they provide a reliable stream and steady amount of product.
2. Access to products you otherwise wouldn’t have
Unless you’re running a larger business, creating your own products takes a lot of time and resources. Wholesalers are needed when your business is unable to purchase directly from suppliers because purchase quantities are too low to meet suppliers’ minimum order requirements.
3. Better prices
Even for business owners that do meet supplier’s minimum order requirements, wholesalers can often purchase products in bulk and obtain better prices from suppliers. If you work with a wholesaler, they’ll likely have relationships in place that offer better low-price discounts for quality products in your industry.
4. Geographical access to products
With a wholesaler, you can access a wider range of product because you’re not restricted to suppliers closest to you. The wholesale distribution model gives you access to a larger range of new products to choose from if you want to expand your product inventory and SKU count, wholesalers can help you meet these goals.
5. Quality control
By working with a reliable wholesaler, you can monitor product quality control by tracking how their products perform with customers. If they receive too many negative reviews or complaints, you can make the decision to switch to a different wholesale distributor.
3 challenges ecommerce companies face in finding a wholesale distributor
Wholesaling is fairly new to the ecommerce industry. Many wholesalers prefer to work with traditional retailers who have been around for a long time, and they sometimes can be skeptical about working with ecommerce businesses.
Here are some of the challenges ecommerce businesses face when sourcing a wholesale distributor.
1. Some wholesalers are better than others
Talk to any ecommerce brand who has had experience working with a wholesale distributor and they will tell you that some are better than others. Finding a quality wholesale distributor to work with is critical, but also difficult.
There are no review sites for wholesalers, so you’ll want to ask for references or ask people in your network to source a high-quality wholesaler you can trust.
2. Many wholesale distributors don’t dropship
Many ecommerce businesses want distributors to dropship so they don’t have to keep too much inventory on hand. Unfortunately, many wholesale distributors steer away from dropshipping since it doesn’t fit their business model.
3. Wholesale distributors are often reluctant to work with ecommerce companies
Even with the rise of ecommerce, wholesalers are still skeptical about working with ecommerce companies. These reasons include:
- Distributors have field sales reps who don’t like online stores doing their job for them
- Some suppliers don’t want their products in online stores
- Distributors often want the product data, which goes to the ecommerce store instead
6 tips on finding a wholesale distributor for your ecommerce business
Finding a wholesaler to work with can seem like a daunting task, but it doesn’t have to be. Follow the tips below to learn how to find the right wholesale distributor for your business.
1. Contact the supplier first
Before researching wholesale distributors, contact suppliers to see if you can purchase directly from them. They usually have a minimum purchase requirement, so if you can’t meet their requirements, then you should work with a wholesaler.
2. Ask the supplier for a list of wholesale distributors
The supplier of the product you are buying is likely the best source of information on who the distributors are and how reputable they are. Ask them for contact information so you can get in touch directly.
3. Contact each distributor
Reach out to a contact at each distributor, ask their minimum order requirements and wholesale unit prices.
4. Investigate B2B marketplaces
B2B marketplaces like Alibaba are a great place to find distributors for all kinds of products. While B2B ecommerce is a more time-consuming process, it can deliver great benefits to your business.
5. Search for wholesalers online
You can start the sourcing process by doing a quick search online. Search “wholesale distributor” + product or niche keywords.
6. Ask for samples
When you’ve found a distributor for consideration, get a sample of their product, inspect, and test it for yourself.
3 resources to source a wholesale distributor for ecommerce
To help steer you in the right direction, there are a few wholesale distributor resources worth checking out. Below are three distributor marketplaces and directories to help you source the right one for your business.
Alibaba offers a wholesale marketplace where you can find distributors for all different product niches. Here you can easily compare options in a particular product or niche.
SaleHoo is a powerful research tool, supplier directory, and online community for dropshippers, wholesalers, and ecommerce stores. It is one of the largest wholesale directories on the internet.
Wholesale Central is a directory of wholesale products. You can find items both from importers and domestic manufacturers in a variety of niches.
If used correctly, wholesalers offer great benefits to help grow your ecommerce business. While it may take trial and error to find the right wholesalers, they can be worth working with. If you don’t want to work with wholesalers, consider 3PLs as the next-best alternative.
Let ShipBob manage your inventory and fulfillment
ShipBob is a 3PL that specializes in direct-to-consumer fulfillment and can handle some B2B/wholesale orders as well. If you want orders stored close to your end customers to be delivered quickly, check out ShipBob and see if we’d be a good fit for your business’s ecommerce fulfillment needs.
Learn more about ShipBob’s fulfillment services by requesting a quote below.