Are you wanting to sell products online to make extra income? Are you struggling to find wholesalers who will sell to an online store? When you find a wholesaler and the products you want to sell, are you struggling to organize the information and get back to it quickly when you need it? What can you do to drastically reduce the time it takes to assemble product information and then make sense of it?
To sell products successfully online, you need some critical information for each product:
1. Market and product research information
2. Current Demand
3. Current Supply
4. Current competition
5. Competitive pricing in eBay Auctions
6. Competitive pricing in major Retail (Amazon)
Once you secure the information for EACH product you want to sell, you need to sort it and track it different ways. It’s a major task to try to set this up on Excel Worksheets. That’s why the team at www.worldwidebrands.com has developed a unique Product Sourcing Tool designed to meet the needs of active online retailers.
Research
Using a keyword, the Research Tool provides a complete Demand/Supply/Competion Picture for you in one place using simple organized tabs. For each keyword you use to search, the tool identifies the other keywords used by browsers to find such a product. This way you can perform multiple product searches to help identify the niche you can possibly sell into. Your searches can be saved for later to help with trending. There is no risk of errors trying to cut and paste or re-key information into an Excel Worksheet.
Suppliers
For each keyword search, The Product Sourcing Tool identifies qualified wholesale suppliers willing to work with online retailers and supply wholesale products to sell via Amazon, eBay, Yahoo! Stores or customized websites. It identifies the wholesale supplier that offer products for dropshipping, light bulk, large volume & liquidation.separately. Searches can be saved by Supplier. Suppliers can be located by city, state or country in the tool as well, so if you want to locate a supplier in your region, you can easily locate them. You can save your Preferred Suppliers separately - Add To My Suppliers. You can also list suppliers that you cannot review when you see them but want to come back to them - Preferred Supplier. It’s a fast way of finding retail wholesale relationships and identifying drop ship products. http://www.worldwidebrands.com/pop_taketour.asp.
Saving You Time
Time wasting for new online retailers includes:
Keying and emailing your company information to multiple wholesalers to request the opening of an account with those wholesalers. The My Account section of the tool allows you to update the information once and then send an accurate, up-to-date information sheet to as many wholesalers as you need.
Looking for specific products you don’t find listed. With WorldwideBrands.com, you don’t have to do the work. Just contact info@worldwidebrands.com, tell us what product/s you need to find and we will do the research work for you and find the right wholesale supplier for you.
Identifying what’s new. You can select Show Only Last 30 Added from the Tools’ Dashboard and bingo, all the latest stuff is there for your review.
Wasting time researching products that eventually you determine you cannot sell on eBay or Amazon anyway. The Tool clearly identifies these in the search result before you spend any time contacting the wholesale supplier.
Time is of the essence when you start to develop your own online retail business. As Product Sourcing is an ongoing requirement to keep your business fresh and alive, and growing, it’s important that you have an organized and swift method of getting product information and being able to recall quickly it any time you need it.
Visit the WorldwideBrands.com Testimonials section to hear how many others have saved time finding and managing the products they want to sell.
When you ask a genuine wholesale supplier for an account with credit terms, the wholesaler typically asks you for Trade References. When supplying a Trade Reference your provide a telephone (fax or email address) that allows the new wholesale supplier to contact people your have purchased from in the past to determine your payment history and credit worthiness.
A new business will not have any prior credit history. You will have to pay up front or using your credit card until you have built up a good credit history with your wholesale supplier. That wholesale supplier then becomes a Trade Reference for you (provided you have a good payment history with that wholesale supplier.)
Here’s our next term: “Net 30″. Net 30 refers to the credit terms your wholesale supplier extends to you. When your wholesale supplier types Net 30 on your order and invoice, this means you have 30 days to pay for that invoice. The advantage of such payment terms is that you have some time to sell all of the products on that invoice and actually receive the money before you have to PAY for the goods.
If you are new to that wholesaler, you cannot expect to get Net 30 terms from the start. Wholesalers base your credit terms on your business credit HISTORY, not your personal credit history. You begin by paying up front for your purchases with cash or credit card until you build a good purchase and credit history with your wholesale supplier. At that point you can apply for Net 30 terms from your wholesale supplier. The more business you bring them, the sooner you can request a Net 30 order.
Once your account is approved, you can begin to establish a business credit history. This will also help you get Net 30 terms with other wholesale suppliers more quickly.
The third wholesale term you should know is: MOQ. Typically the Confidential Dealer Price List has a column headed: MOQ, “Minimum Order Quantity”. When you place orders, the MOQ determines the smallest quantity of the item you can order at a time. The MOQ is different for different items. Typically, the larger, pricier products have a smaller MOQ than the less pricey and smaller products. This also determines the smallest quantity at which the wholesaler can make a profit on an item. Remember that wholesaling is a volume business. Because profit margins are thin, wholesalers only make money by selling in large quantities.
It helps when you talk with your wholesale suppliers, to talk in their own language. Online sellers should know the common terms that REAL Wholesalers use. This absolutely helps in building good business relationships with them. Wholesalers have their own industry terms and jargon. As a retailer, it’s good for you to be able to talk with them in their own language. This avoids misunderstandings. Also, you won’t have to stop them and ask that they explain what they mean. They’ll treat you more seriously if they sense that you understand their business.
In this next set of tips, we will explore a few of the most common terms you’ll encounter when talking to your wholesalers. While many online retailers have heard these terms, most don’t really know what they mean or even how they influence their selling.
MAP - “Manufacturer’s Advertised Price”
Let’s begin with: “MAP” or “Manufacturer’s Advertised Price”. When a wholesaler requires you use MAP pricing, they are instructing you NOT to sell their products on eBay (or anywhere else!) for LESS than the MAP price.
There’s a very good reason why Suppliers enforce the MAP. The MAP sets the market’s perception of the value of their products in the marketplace. Price cutting on eBay or other selling platforms by online sellers trying to out-do each other, devalues consumers’ perception of the product and brand. When this happens, the large brick-and-mortar stores, with overhead costs higher than eBay sellers, stop selling the product because they cannot afford to sell it for those prices and still make a profit margin.
The wholesaler’s biggest volumes come from those large brick-and-mortar stores. If they stop carrying the wholesaler’s products, the wholesaler’s sales volumes slump and they can no longer justify selling the product. The small online sellers eventually loose out because they can no longer source the products. They have in fact, shot themselves in the foot.
The MAP is a protective measure to retain the product’s market value. This protects everyone in the product supply chain.
Drop Shipping is now a well known term with people selling online. For Beginners, Drop Shipping provides a low cost and low risk solution. A Beginner in online retailing, typically doesn’t have a lot of money to purchase inventory. Drop Shipping provides a wholesale option that allows beginners to start selling without a lot of start up expense or risk.
For some wholesale suppliers, Drop Shipping is an added service. Most wholesalers are not set up for single item product sales. It’s not easy to find a REAL wholesale drop shipper. There are many websites that say they are drop shippers but so many - especially those advertising in the search engines - are some form of wholesale scam.
Once you locate a REAL wholesale drop shipper, you will be asked to follow a process like this:
You apply for and set up an account with the drop shipper.
The drop shipper sends you product pictures and descriptions that you can use on your retail site.
A retail customer buys one of the products you have listed.
You email the drop shipper and place an order for the item.
The drop shipper sends the item from THEIR warehouse to YOUR customer using YOUR name and label.
Your customer has already paid you the retail price.
Now you pay the wholesale price to the drop shipper once they ship the product.
Without touching the item, you make a profit on the sale.
Becareful not to view drop shipping as a magic bullet. Each time you drop ship products, you will pay a higher wholesale price than when you buy those same products in volume. Because wholesaling is a volume business, the wholesale price you’ll pay on one item is higher than the wholesale price you’ll pay on an item in a bulk lot. Typically, the wholesaler maintains separate warehouse space for drop ship inventory, and must pay their employees to go into the warehouse and pick, pack and ship each individual product for you. The drop shipper pays for shipping materials and special tracking software. They have a number of incremental costs to be able to provide this service for you. Your drop shipping costs will reflect that.
Drop shipping is an excellent entry point to start selling online. It is also a low-risk method for testing new products without having to purchase inventory that might not sell. It’s wise to use drop shipping to identify products that sell well into your customer base. The profits you make from your drop ship sales can be used to start buying the better-selling products in bulk. This way you increase your profit margins, and your business grows faster. This is how most successful online retailers get started. It should work for you too!
There are some wholesalers who sell to consumers through their own Retail stores - and that’s okay.
Many online retailers get upset when they discover that their wholesaler has a retail store. We all fear competition - especially from one’s own supplier. The supplier can undercut prices. However, wholesalers cannot afford to harm their retailers’ business. They are dependent on having many retailers selling their inventory. Typically a wholesaler who has a retail store will sell their products to their retailers at prices about 30% less than the wholesaler will offer the products for sale directly to consumers. A wholesaler’s mission is to sell their products AT wholesale prices. Selling, to the disadvantage of their retailers, is effectively killing their wholesale business.
Real wholesalers typically don’t advertise in the search engines. So those you find through search engines may be middlemen and not real wholesalers. If you find a wholesaler in the search engines, that claims to be a wholesaler but has a retail site of their own, you have probably discovered a wholesale scam.
Don’t get disgruntled if your Wholesaler has a Retail site. Find real wholesalers through a trusted source. If that wholesaler also has a retail site, there is typically no need for concern. It is not in your wholesaler’s best interest to undercut you or even put you out of business. Generally they will offer you prices at least discounted 30% below their own retail prices. You should be able to compete with them.
Beginner online sellers soon discover that volume buying will lower a wholesale price. Many online sellers don’t understand why wholesalers offer a lower price for an item when one orders more frequently and in large quantities. Many small eCommerce sellers complain when competitors’ sell at lower retail prices than the wholesale prices they can buy at. It’s a understandable frustration. Almost always, the reason is because, their competitor is bigger and buys in larger quantities than they do. The competitor is getting better price breaks.
When buying from a wholesaler, your price per unit will go down as you increase your order size. For example: from 1 to 100 units of a product per purchase, the wholesale price per unit might be $5 each. When you buy from 101 to 250 units of a product, the unit price might come down to $4 each. Wholesalers only make profits when they sell in volume because they make such thin profits per unit. The more you buy per order, the better the price per item they can allow you.
The online retailers who can afford purchasing in bulk get lower prices. They can afford to price lower to their retail customer and still make a profit. Don’t be too concerned! Although many online sellers think they have to slash prices to compete, it doesn’t have to be so. There’s more to selling than having the lowest price on offer. Buyers will spend more with retailers that offer value-for-money. Successful selling depends on building a customer’s trust and providing something of value that’s worth the higher price.
You may begin by drop shipping or even buying in small quantities. As soon as you find products that sell quicker than others, start placing larger orders and negotiate for better Volume Price Breaks. This way you will grow your online business out of your own cash flow.
You need to be patient when you reach out to a genuine wholesale supplier to open an account. Success seldom comes in a rush! Beginner online retailers are usually in a hurry to start their Internet business. They try to throw up a website today to be rich tomorrow. Typically such impatient business people are not the ones who succeed in the end.
Many new online sellers make an impulsive call to contact a wholesale supplier asking to open an account. If they don’t get a response within a day or two, often within an HOUR or two, they leave complaining voicemails and send aggressive emails trying to badger the supplier into responding.
Good wholesale suppliers are busy. They process many account requests as quickly as they can. Setting up an account requires a lot of work by the wholesale representative and administration department. They capture your information, verify it and then process it. They must check it against the company’s criteria for granting accounts and establish if you and your business are a good fit for their business. They then have to do the paperwork to set up the account. Some suppliers can do this within a few days. Some will take two to four weeks.
There can be seasonal delays in setting up an account for you. Seasons for wholesalers occur well in advance of the retail selling season. The Holiday season actually begins in July. During this busy time, a wholesaler will likely take longer to respond to your requests. Spring and early summer are good times for faster processing because they are slower periods for most wholesalers. The wholesaler’s auditors typically get active around the beginning of January each year. Many wholesalers perform stock taking for the upcoming year and may even close down their administration support for one or two weeks. At that time you may find it takes longer to communicate with your targeted wholesale supplier.
If you really want a “yes” from a wholesale supplier, don’t rush them. Be patient, get on with other research and online selling activities. They will get to processing your application. Of course, it’s appropriate to remind them occassionally, but be sure to be nice about it! You’re wanting to build a good relationship, don’t start it out on an aggressive footing.
Review the fees your wholesaler says they must charge you. If you hear ‘refundable deposit’ be on the alert. There are fees a real wholesaler will never charge. An Account Set Up Fee and a monthly account maintenance fee, for example, are certain warnings that you are talking with a wholesale scammer, NOT a genuine wholesale supplier.
Some legitimate wholesalers may charge you a small refundable DEPOSIT on opening an account for you. Typically this deposit gets refunded when you place your first order. The important word here is ‘refundable’. A one hundred dollar deposit charged when setting up your account should get refunded to you when you place your first order of at least $100 of product.
The deposit is actually a valid charge. The wholesaler uses it as a deterent to online sellers who are not really serious about buying from the wholesaler. Online sellers are building a reputation for being ‘Wholesale Tire Kickers’. Many eCommerce sellers set up free accounts with multiple wholesalers BEFORE they’ve even decided what they want to sell. Too often, online sellers never return to buy anything. It costs the wholesaler money to open these accounts. The deposit covers their set up costs. Online Sellers who are not serious typically avoid opening an account that requires a deposit.
The wholesaler isn’t pricing to make money this way. It is merely a deterrent. You must check that the deposit is refundable. Typically only a Scammer requires a non-refundable account set-up fee. Beware. This is not a real wholesaler!
