Wholesalers with Retail Stores?

Wholesalers with Retail Stores?

May 24th, 2009

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.

Click to review more of Chris Malta’s “Wholesale Tips”

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9 Comments

  1. I’m new to this thing, and an learning. I just joined twitter, and don’t know what I’m doing. I just watched your video and it made sense. I have just begun an e-commerce venture and my first website is (earthentials.com). I have over 700 items on it so far, and have launched it, but have not sold anything yet. I got most of my dropshippers from World Wide Brands. Can you give me any advice as to how to promote my site?

    Thanks

    Comment by Robert Brewer — May 25, 2009 @ 6:29 pm

  2. Robert, Take a look at the Traffic Tips bonus video by Andy Jenkins inside your membership under the WholeSale. That will help you. If you have a yahoo store, watch the videos about SEO for Yahoo Stores at http://www.worldwidebrands.com/video/yahoo. Don’t forget – ask your questions in the forum too.

    Comment by cmarshall — May 28, 2009 @ 10:57 am

  3. I am learning how to sell my item to the world now! my website has been launched for about one month, I sold CECT CELL PHONE, CAR DVD PLAYER, CCTV CAMERA, IPHONE ACCESSORIES WITH BEST PRICE, but up to now, I found it is very difficult to get the traffic! could you tell me what I should do firstly!

    Thanks in advance!

    Comment by randolph — June 20, 2009 @ 12:42 pm

  4. Hi Randolph,

    I suggest attending one of our free webinars to learn more specifics to your question. You can register at http://www.worldwidebrands.com/sourcingwebinars

    To your Success,
    Colette Marshall
    http://www.Twitter.com/ColetteMarshall

    Comment by Colette Marshall — July 9, 2009 @ 10:32 am

  5. Excellently written write-up, doubts all bloggers offered exactly the same content material because you, the internet is a greater place. Please maintain it up!

    Comment by Angella — February 19, 2012 @ 5:24 pm

  6. I had originally considered starting my own apparel line, but a small shop seems much more fitting at the moment. I have a huge love for the products I want to sell, but after much research about wholesale, I am wondering if I should move further up the chain.

    If the wholesaler can sell to the end consumer, is it worth being a retailer? What are the advantages and disadvantages of wholesaler vs retailer besides needing to have enough space/insurance to store the merchandise?

    Comment by Michelle — September 16, 2012 @ 1:20 am

  7. Hi Michelle,

    Costs! Cost is the biggest hurdle that many small business owners can’t overcome.

    You have to have a wholesale license.
    You have to have warehouse space.
    Purchase boxes and packing materials and labels.
    Will need a forklift.
    Inventory System.
    Get approved to wholesale products from manufacturers. (this can be really costly. As you aren’t trying to meet minimum order quantities for retailing, wholesale quantities are MUCH higher)

    When doing wholesale, you have to have a physical warehouse location because you will receive products by the container load. So they will not deliver to you unless your location is sanctioned to receive semitruck loads of products. So you will generally need a loading dock for deliveries. Time is of the essence for delivery drivers, so you will need a forklift to take the products off the truck.

    Hope that helps answer your question!

    Tisha Hedges
    Director of Operations
    WorldwideBrands.com

    Comment by Tisha Hedges — September 17, 2012 @ 5:10 pm

  8. Great video and info, thanks!

    Comment by Rachel — March 6, 2013 @ 4:32 am

  9. Once you do your research, you will see that this isn’t a problem, just like this post says.

    Comment by Sheldon — March 6, 2013 @ 1:59 pm

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