An Unreliable Wholesaler - A Black Hole in Your Sales

by Paul Mroczka

Published on this site: April 12th, 2006 - See more articles from this month

You are preparing to open your business - you know what you are going to sell, your premises or website are being setup, and you have your wholesaler all set to go. But is your wholesaler really ready? What do you know about them? How did you choose the company with whom you are going to do business? These are, after all, the people who control your ability to offer a specific product in a timely manner. They are a very basic element of your success or failure.

A wholesaler is a company or trading entity that buys large quantities of specific products at a discount from manufacturers and then sells each product in smaller lots to vendors, also known as retailers, who will then resell the product in even smaller lots to the general public. If you have a business focused on selling products to the public, you are a retailer, and you will get your products from wholesalers.

There are a few essentials to look for when considering suppliers, including reliability and punctuality, company history, liquidity and financial health, commitment to value and quality, ethics and trustworthiness, and customer service. Before deciding on whom you are going to do business with you must complete some homework by investigating potential wholesalers in accordance with the six general categories above.

After searching out wholesalers and creating a list of contacts, your next step should be to directly speak with these potential suppliers. Talking with someone at the company - making a direct contact that goes beyond e-mail - should be very simple. This is actually your first test of their commitment to service. If a distributor doesn't take the time to connect with you, you will have grounds to question their concern for customer relations.

When conversing with a wholesaler ask questions regarding payment terms, turnaround time on orders, quality control, and their business philosophy. Business philosophy simply means - what is their company most committed to when it comes to their day-to-day operation? Be sure to listen carefully, ask follow-up questions, and request clarification on anything that is not clear. At the end of your conversation, you should request information about their company and also ask for business references.

If the wholesaler says they cannot supply references that should be a warning flag. Any business should be able to provide a few names of companies or people with whom they have conducted business.

Also, they should mail or e-mail you some sort of informational package. This is the first test regarding their turnaround time. If they forget to send you information you requested or if it takes longer than 5 business days, you probably want to forget about dealing with this company. Additionally, what they send you, how organised it is, and how detailed and professional it looks will be a good barometer regarding the company's standards and performance. Read any materials you receive carefully and check to see if there is some sort of company history and business philosophy included.

Notice, without risking any money at all, you have probably already eliminated some distributors while placing others on your shortlist. Of the six categories listed above you have already gathered useful information on reliability and punctuality, company history, ethics and trustworthiness, and customer service.

Perhaps you have contacted eight companies and you like two. Search for more wholesalers to interview. A sampling of 10 to 15 will give you a good idea of the range of distributors that exist and their different policies, standards and services. Don't stop after speaking with two, three or five. It's just not a big enough sampling on which to make such an important business decision.

One important area to weight carefully is company history. If a wholesaler has been in existence 20, 40, 70, 100 years or more - that certainly says something about their company. In this increasingly competitive world, businesses do not continue to pass the test of time unless they are simultaneously stable and well run while being adaptable to the changing marketplace. This does not mean a newly formed company will not serve your needs, nor does longevity insure your total satisfaction; the length of a wholesaler's history is simply one of many ways to gauge their competence and reliability.

After performing your research and reviewing the information you have collected, you may still be unsure of which distributor you should choose. You may certainly decide to go with more than one source for merchandise due to different styles, brands, and price ranges they offer. You can always go with the wholesalers at the top of your list, knowing that you still have information on a second or even third choice, which you could fall back on if your initial pick proves to be ill-advised.

One thing to remember is that after following through on your queries your final decision may be based on a feeling - a gut reaction - rather than on cerebral deduction. Still, the fact is all of the work you have done has not been wasted. You have used it to get to the point where you have two, three or maybe even four sound choices. You really won't know if you have made the correct choice until your business is up and running - taking orders and, because of your hard work, delivering the goods.

Paul Mroczka is chief editor at http://www.esources.co.uk, a
UK wholesale suppliers and wholesalers B2B trade portal based in London, UK.