Don’t assume that all wholesale suppliers are willing to work with online retailers. You might think that because they want to sell products, that they would welcome you as a new sales channel. But they don’t!
Why a Wholesale Supplier Won’t Work With You
Factory-authorized wholesalers actually have good reasons why they prefer not to work with online retailers:
- Online retailers are typically small accounts. Real wholesalers – especially the large ones – look for volume business. They spend most of their time dealing with retailers like Target, Wal-Mart, and Home Depot who place large, frequent orders for products. With the small volumes from online retailers, a wholesaler actually spends as much time time processing a small order as they do on the ‘big box’ retailer’s order. As the revenues are much lower, their profit per order is lower. Unfortunately, beginner online retailers typically apply for many wholesale accounts – especially Drop Ship accounts – and then purchase very little. Wholesaler’s recognize that online retailers require a lot of support for very little return.
- Wholesalers have to pay commissioned sale representatives to support each approved retail account. Reps earn less commission from Internet retailers than their bigger box customers. Reps like to spend more time where they can generate larger earnings.
- Some manufacturers prevent their authorized wholesalers from selling to online retailers too. This is typical of the highly recognized brands. You have to be an authorized dealer with large volume purchases. They do this to maintain a perception of their brand as a high value brand. Beginner online retailers often enter markets by slashing prices to be the lowest price on the web. Online sellers have very little overhead so can often offer products at lower prices than brick-and-mortar retailers. Once product prices plunge, brands become devalued. If the physical retailer (the largest source of revenue for wholesalers) cannot sell profitably, they will stop carrying that brand. Everybody loses.
- Inexperience. Because of the newness of most online retailers, they don’t understand how to market the products like pros do. Inexperienced retailers ask too many questions, & take up the suppliers rep time. The supplier is already taking a loss just by working with you, and now you are taking up a lot of their time with questions?
These are just a few of the many reasons why a wholesaler may be reluctant to open an account for you as an online retailer.
How to Secure a Wholesale Account
But if you approach the wholesaler correctly, you can succeed in your application for an account on your first contact with a wholesaler if you…:
- Read the material first. Suppliers typically have wholesale information pages. Or you can find Terms and Conditions and other links on the bottom of their websites. Take time to READ their policies and procedures and make sure that they align with yours before you contact the supplier. Knowing these policies beforehand will save you time when communicating with the supplier. It will also impress them if you took the time.
- Only contact the wholesaler when you are a registered business. Quickly let them know you are a valid business before asking about their products and prices. (“Hello, I am Tisha Hedges, owner of Tisha’s Enterprises. in Illinois”). The wholesale rep would then be thinking: OK.. “WIFM.” (What’s In it For Me?) Help them understand you’re a RETAILER on a path to sell their products in volume and you looked over their wholesale terms and you are interested in being a dealer for them. Rehearse your call before calling. Make your introduction quickly and get to the point.
- Ask what the wholesale rep needs from YOU to set up an account. If you come across as attending to the rep’s needs before launching into your own needs it will show professionalism. If you come across as high-maintenance, or a low-value account with no plan for growth, the wholesaler is likely to decline you for an account. They DON’T have to work with you.
- List their requirements, thank them and hang up. Focus on determining their requirements for a dealer account, provide those details to them if they are ready to setup the account on the phone. So have all that info handy and secure the wholesale account set up.
Always remember, the FIRST contact should be brief. Be prepared and professional. You want to secure that wholesale account, instead of “No, thanks.”
Finding Wholesale Suppliers that Work with Online Retailers
But there are still a lot of wholesale suppliers out there that won’t work with an online retailer. It’s a solid NO regardless of how much you understand who they are and what they provide and how professional you may be.
Don’t waste your time trying to find wholesale suppliers that work with online retailers. We have already done that work for you!
For over 20 years we have found thousands of suppliers that work with online retailers and everyday we work on finding more!