It isn’t always easy to find wholesale distributors for your business needs, with many more focused on traditional sellers with brick-and-mortar stores than online sales.
However, finding reliable distribution partners is important for the growth and profitability of your business.
How wholesale distributors can add value
If your products are already selling successfully, you might be looking for a wholesale distributor to help you access as many new outlets as possible.
They will hold many different products and sell them to multiple retailers. They often specialize in a specific market sector, so they will add expert knowledge and will already have solutions for storage, transport, and delivery challenges. They can save you time and costs if this isn’t your field of expertise. If you choose well, they will have an established network of customers so you will benefit from immediate access to a large potential market.
Retailers will often prefer to negotiate and place orders with a distributor across a range of products, rather than dealing with multiple manufacturers. In many cases, distributors will also take back unsold products and extend credit, helping retailers to sell more.
Where to look for wholesale distributors
Searching online for potential wholesalers could be a good place to start, visiting directories and sites such as the Chinese wholesale marketplace Alibaba and eBay’s Wholesale & Job Lots page. You can also find suppliers organized by the type of merchandise on sites like Worldwide Brands. However, price points, laws, and distribution practices can vary according to location, so you’ll need to look for options suited to your business.
To build your online business with confidence you will want to work with wholesale distributors that can be part of your strategic plans. Recommendations from other business owners and manufacturers can be the beginning of this journey, so it’s worth looking for sector and local networking opportunities.
Most industries have trade associations where manufacturers, retailers, and distributors can meet nationally and regionally. You will be able to learn more about how other businesses sell their products, their best practices, and established distribution channels. Depending on your market sector you can use relevant publications to research your options and to find out about the latest trends and innovations.
You can also attend trade shows that target your market sector to give you an overview of trends, options, and requirements. You will be able to find out which distributors deliver the best results, learn about their reputations, and assess whether they would be a good fit for your business.
Do you need a distributor?
Direct to consumer (D2C) online sales are now easier than ever before so you will need to review the benefits of this approach compared to working with a distributor.
The first consideration is how many intermediaries might be involved before your product reaches the end user. Each will need to make a profit from their part of the process which will either reduce your profitability or increase the cost for customers.
Here are some considerations:
Your customers – your products need to be available where your customers are most likely to look for them. If their preference is for online shopping then your strategy will need to focus on your own website, marketplaces, and social selling rather than retail stores. If your product is more likely to tempt people on impulse or your audience prefers physical shopping then you will need to find the best possible way for them to discover your product in stores.
Online demand – you can gain an understanding of the online market for your product by looking at what your competitors are doing via their own websites or on marketplaces. If they are selling directly to customers online, you probably need to as well. You can also explore relevant online search terms and the cost for online advertising as indicators of online popularity.
Capacity – when you sell directly to your customers, you can minimize the risk of running out of stock by managing expectations. If you are working with a distributor, they will expect you to have enough capacity to meet their orders.
Retailers – large supermarket chains often deal directly with manufacturers and producers but will drive a hard bargain. For ease and simplicity other retailers will often prefer to work with distributors.
How to evaluate distributors
If wholesale distribution is the right choice for your business you will need to define your requirements clearly in the long- and short-term to create a profile of your ideal partner. Your criteria might include:
Your goals – spend some time understanding whether your goals and values are well-aligned with potential distributors. For example, if sustainability and environmental impact are important to you, you will want to see and understand their policies and plans.
Size – you will want to know that your needs can be accommodated but you will also want to be a valued client. It’s important to assess whether the distributors on your shortlist are either too large or too small to suit your business.
Business stability – the distributors under consideration should be happy to share financial information so that you can assess their viability as a long-term business partner.
Expertise – a general-purpose distributor might be suitable but if your products are fragile or need special storage and transport you will want a partner with proven expertise.
Sales and marketing – you will be looking for a distributor with a strong sales and marketing track record that can successfully create demand for your product. Ask for information about the size of the team, marketing methods, and results.
Contacts – your distributor should be able to provide evidence that major retailers in your market sector know and trust them. Ask for testimonials and recommendations.
Inventory management and logistics – to have confidence that your product is in safe hands you will need to know about warehousing and how inventory is handled. If your potential partners own their own fleets, confirm their size and review issues like breakdowns, safety, and performance. If they work with third-parties you will want to know that they are reliable.
Management – make sure you understand who is in charge, how staff are recruited and that good personnel practices are followed.
Will distributors want to work with you?
While you are evaluating distributors for value and competence, they will also be assessing you. They are looking for businesses with established products and good potential sales.
To improve your chances of working with the best in the field you can:
Be knowledgeable – provide evidence that you are efficient and effective, that you understand your market, and have clear goals for the future. If possible, obtain testimonials from existing customers.
Demonstrate demand – accurate and reliable figures about demand, sales and customer satisfaction will be important to show you are a suitable business partner.
Take branding seriously – your distributor will want to work with a credible brand that their customers will take seriously so make sure your design, content, presence, and customer experience standards are high.
Show commitment – building a business relationship with your distributor will take time, so they will want to see evidence of your long-term plans and commitment.
Build good foundations – an ecommerce site that is technically advanced with plenty of scope for integration and customization will provide firm foundations for your business. You will be able to show that you are established in your market, with clear evidence of growth and high standards.
Cloudfy provides all the business to business (B2B) ecommerce functionality you could need at your fingertips, so you will be well-placed to choose the best distribution partner for your business and move ahead with confidence.
Book your free online demonstration to find out more about Cloudfy.