Using a Broker to Source Wholesale Products
by Danny Brown on February 1st, 2008
If you’re relatively new to working with a wholesaler to provide you with products to sell, there’s a host of things you need to go through. Choosing the right wholesaler, setting up an agreement, payment schedules, deliveries, and so much more. To help with this process, you can actually make use of a broker to source your products for you, taking away a major part of the overall wholesaler process.
However, just like there are good and bad wholesalers, so there are also good and bad brokers; so you need to make sure that you do your research first. This will help you understand the role of a broker, and what you should and shouldn’t be looking for when you appoint one to work on your behalf.
What Does a Broker Do?
When you think of a broker, you may think of a finance broker or insurance broker, and wonder where this all fits in with your wholesale needs. Yet a broker working on your behalf is just like the ones you are familiar with - the difference is that they’re trying to procure your wholesale products at the best price, instead of you doing all the legwork. For this they will usually charge a commission fee or mark-up so you need to be sure that you’re aware of what they should be doing for the money you’re paying them.
Should You Use a Broker?
If you’re relatively new to the wholesale market, and you’re not sure what all the jargon is and whether or not you’re getting a good price from your supplier, this is the time that you might want to consider a broker. These are financial experts that have been specifically trained in the field of business that you’re entering. They will be able to tell you what wholesale markets are offering the best prices, the best service and the best reputation.
This type of information can be invaluable when it comes to saving money that you can then invest back into your business. Additionally, a broker can ensure that a wholesale supplier has good credit, and that you won’t be left with empty orders after paying an invoice.
Questions to Ask a Broker
If you do decide to use a broker, there are some things that you should ask him or her. These are simple run-of-the-mill questions that will help you decide whether the broker you’re considering knows their stuff. Some of the questions you should ask include:
* How long have they been a broker
* What are their qualifications
* What results can they show you
* Will they work with Escrow or a similar safe payment method
* What procedures do they have in place if a deal goes wrong
There are more questions that you can ask, which will be specific to your business and industry, so make a list of the things you want to know. Once you have all this, do a little research on brokers or brokerage firms in your area and set up an in-person meeting.
Where to Find a Broker
Once you’ve decided to use a broker to act on your behalf and you know what questions to ask, the final thing you need to do is actually find one. You can either do this via your local business directory, Chamber of Commerce or Small Business Association - each one can offer you valuable advice on where you can find a broker.