With the present state of the economy, where more and more people are losing their jobs, and making both ends meet is becoming increasingly difficult, a viable option to supplement your income is to become a sole trader and sell wholesale products. However, although it might seem easy to buy wholesale products and sell them at retail value and make a cool profit, it is necessary to be aware of which products to source, where to source them, and where to sell them. Moreover, dealing with wholesale suppliers as a sole trader is also a complex proposition, and it is necessary to do thorough research regarding finding wholesale suppliers and profitable products on different websites before starting any such business. However, the most important aspect of this business is to know exactly how to deal with these wholesale suppliers.
There are many websites that provide deep insight into dealing with wholesalers because they also have special forums where experts and other members express their opinions, experiences, and tips. These forums can help the sole trader to source products and locate genuine suppliers. There is no registration or subscription fee, and the sole trader can get expert business advice and community support. The forums also act as service platforms for buyers and sellers to form a network to share trade leads, form trading partners, and identify profitable business opportunities. A business-to-business community is formed, which acts as a wholesaler for sole traders, wholesalers, product distributors, and trade stock buyers.
In order to find and deal with wholesale suppliers, it is essential to follow the following steps.
Sourcing a Wholesale Supplier
The first step in starting off as a sole trader is to find a reliable wholesale supplier. A supplier should be easy to work with him, and he will honor his commitments. Many sole traders have been taken for a ride by unscrupulous wholesalers in different ways. It is, therefore essential to exercise caution and do a thorough search before finalizing who to work with. The local phone book and the Internet are the ideal sources to find a suitable wholesale supplier. There are many websites and wholesale directories that have plenty of information regarding finding good and reliable companies. It would be advisable to short-list some of the potential wholesalers and then look at the reviews on Google from previous buyers who have done business with them. It should not be difficult to choose an appropriate wholesaler. It might be more profitable to deal with overseas wholesalers because products are available at a cheaper rate in countries like China, but as a first step in this business, it is better to start with local wholesalers and gradually build up sufficient experience to be able to deal with overseas suppliers.
Testing The Supplier
Many newcomers in this field have had terrible experiences with wholesale suppliers, like not receiving any goods at all or receiving substandard goods that could not be sold. There have been cases when the goods were supplied long after the scheduled delivery period, and the demand had tapered down by then, so the sole trader was left with a large inventory that spelt financial doom. In order to find the right supplier, it is essential for the sole trader to place a small order and create an impression that he or she is a serious buyer. Constant communication by telephone with questions regarding the position of delivery of the order will make the supplier realize that the sole trader will not tolerate noncompliance of the terms of the order. This will be a good way of testing the supplier.
Bargaining For a Good Deal
The aim of any business is to make money, and getting goods at a cheaper rate and selling them at a much higher rate is the best method of making a substantial amount of profit. As such, it is important to bargain with a supplier in order to bring down the rate. There is no need to get embarrassed for bargaining because the suppliers also look forward to selling their inventories and may offer a discount, particularly if there is the possibility of getting a bulk order. It is also important for the sole trader to cross-check the retail prices of the goods that he or she intends to buy from the wholesaler, because many unscrupulous wholesalers demand an inflated potential retail rate and try to create the impression that the wholesale price will enable the trader to make a large profit. In order to avoid falling prey to such a move, finding out whether the wholesaler’s indications are correct will help the trader.
Smelling a Rat
If the deal offered by a wholesaler appears to be too good to be true, the sole trader should smell a rat and keep way from such a deal, because there must be a catch, which is not apparent in the beginning.
Sole traders should keep away from wholesale brokers because their commissions unnecessarily add to the cost of the goods and decrease the profit margin. Moreover, some of them work secretly for a single wholesaler, and that means that the trader would not get the best deal.
Drop-shipping directories might not be very helpful because only some of the numbers indicated in them actually work. Moreover, drop-shippers are also like middlemen, although they might pose as wholesalers, and they will only inflate the prices.
Checking The Manufacturer’s Factory
It is essential for the solo trader to physically check the office and factory of the manufacturer in order to avoid being conned by self-proclaimed agents who might be posing as manufacturers. This is especially necessary if the source is located in China. The sole trader should also get business registration proof of the supplier and cross-check it with the records held by the government.
This type of payment is only used for sending funds to individuals and not for business transactions, and as such, if the supplier insists on receiving payments through these modes, he should be avoided.
Buying a Sample Product
It is important for the sole trader to buy a sample of the item that he or she wants to buy in bulk. This will give an idea of the quality. It is also important to make sure that the bulk supplies will conform to the same standard and that the supplier has enough inventory to cover the order.