Product Sourcing News   

Setting up Wholesaler Accounts

How to Answer those Tough Questions

BY: Tisha Rogers,
Director of Operations, Worldwidebrands.com

When you’re calling or emailing suppliers to set up accounts for your eBiz, the odds are stacked against you. Many wholesalers see home-based businesses as a very small market. Unfortunately, statistics have proved 80-90% of online sellers who set up wholesaler accounts don’t follow through with them. So naturally, many wholesalers are reluctant to invest the cost of setting up and maintaining accounts for vendors they don’t expect to bring them any business.

Q & A
Because of this situation, wholesalers are going to ask you questions that you may not have the right answers for—but you can prepare for these questions by being ready with the answers they’re looking for. This greatly increases your chances of getting a positive response.

1. Business Name and Tax ID?
Regardless of what anyone tells you, if you want to work with renewable product sources, you will need to provide these. A wholesaler needs proof you’re authorized by your state to collect sales tax. If they sell to anyone without a sales tax ID, they can actually lose their business license, so it’s imperative you have yours ready when you call. There are a few exceptions to this rule. If the company is located in a tax exempt state or if the products they are supplying are non-taxable in their state.

2. Trade and Bank References?
Wholesalers are used to extending credit to their retailers—you can order something now, and be invoiced later, after the order has already shipped. That’s why a supplier will ask for trade references—other suppliers you’ve bought from, and bank references. They’re looking to see that you have a business bank account, and are in good standing with your bank. They want to run your credit before they extend credit to you.

Unfortunately, most sellers can’t provide these references initially. The problem is that getting references requires having an account, and getting an account requires having references.

If you’re just starting out, tell the account representative you don’t want credit terms. Let them know you’d like to pay with cash upfront or use a credit card. This eliminates much of the need for references, and can go a long way towards putting a wholesaler at ease about giving you an account. After you’ve worked with them for a while and established a business relationship, you can ask for credit, and they may become your first trade reference.

3. How Long Have You Been In Business?
If you’re a brand new business, tell them! Some suppliers will work with new businesses; some won’t—you just have to take your chances. Never lie to a wholesaler—not only will you lose your account when they find out, but you’ll ruin your reputation. You might also find yourself trying to sell products you can’t get fulfilled.

4. Do You Have a Physical Location?
Some wholesalers want to see a picture of your brick-and-mortar storefront. Typically, this is because they have physical sales territories they’re protecting, or they’re abiding by the dictates of their manufacturer. Whatever the reason, the bottom line is they don’t want their products on the internet. If they insist you have a material storefront, move on to the next supplier.

You’re not going to get a “Yes” from every company you contact, but you’ll have better success and get a lot further by being prepared when you phone & email. If you understand what they want, you’ve got a better shot at getting an account.