Researching Wholesale Vendors – What To Do Before You Buy
by Carrie Hinkel on October 9th, 2007
E-commerce is a multi-billion dollar industry, and there are an ever-growing number of companies looking to buy the latest and greatest in wholesale merchandise. The problem is that such a demand has sparked the interest of thousands of companies in business solely to scam small business owners into thinking they are legitimate wholesale vendors, when in fact they are not.
In our last article on researching wholesale vendors, we talked about the different types of wholesalers you can source from and how to choose the best option for you. In this article, we’ll be talking about the importance of always thoroughly researching each wholesaler you are considering doing business with. Taking the time to do so before you give them your money will prevent future headaches and empty bank accounts. Here are some simple ways to ensure you are dealing with a reputable wholesaler:
Where to go to research a wholesaler’s background:
- The Better Business Bureau – www.bbbonline.org : See if any complaints have been filed against them.
- The Rip-Off Report – www.ripoffreport.com : See if any past customers have made complaints about the company.
- Dunn & Bradstreet – www.dnb.com : Get in-depth company information such as how long they’ve been in business, how many employees they have, where they are located, etc.
- Alexa – www.alexa.com – By entering in a website and clicking on the “site info” link you can see if others have made comments about them, how long they’ve been online and how much web traffic they really get.
- Who Is – www.whois.com – Find out who owns the domain name and where the company is located.
- Google – Doing a search of the company name and website will let you see if past customers have made any comments regarding them in online forums or blogs.
What questions to ask once you’ve weeded out the potential problem-makers:
1. What companies are you currently working with? Write down every name and then call a few and ask how their dealings have been with that wholesaler.
2. Are you a factory-authorized wholesaler for any manufacturers? If so, which manufacturers? Write down which manufacturers they claim to be an authorized wholesaler for and then call that manufacturer and ask them. Typically a manufacturer will only have a handful of authorized wholesalers, so this will be easy to find out if they are fibbing.
3. Will you email me a copy of your current wholesale price list? Once you have that, do an online search for several of the items and see what prices you can find, both wholesale and retail. You want to make sure that their prices are truly wholesale and not just a third-party markup.
4. What are your payment terms? Do you offer Net 30 terms? As a new buyer, you will most likely be asked to pay upfront. Always pay with a credit card, if possible, because if for some reason you don’t receive the merchandise the credit card company will be able to get your money back for you. Never work with a company that demands a wire transfer, Western Union, Money Gram or other unsecure methods of payment.
5. What is your minimum order? When comparing companies, it will be helpful to know how much you are required to initially purchase.
6. Is shipping included? Some wholesalers include shipping at no cost, while others charge extra.
7. What are your return policies on defective and damaged merchandise? Some wholesalers will give you a credit for faulty merchandise, while others won’t.
There are a variety of choices for finding wholesale products-and that means competition on price, service and shipping, and that’s good for you! It may take some research in the beginning, but once you have a reliable set of wholesale product sources buying will become automatic and much less overwhelming.