| |
|
|
What to Look for in a Wholesale Distributor
by Trevor Marshall
Published on this site: August 31st, 2006 - See
more articles from this month
The wholesaling industry is lucrative, but with a lot of entry barriers.
Hence, you can be sure that those who have managed to obtain success,
even small-sized businesses, are reliable and trustworthy. Thus, all of
them are capable of fulfilling whatever needs you have; only one of them
however can be considered the best.
- Characteristics of a wholesale distributor
Is it a legitimate business?
Do not succumb to temptation and transact with an illegal wholesale
distributor, even if he offers very attractive rates. If you feel shy
about asking the legitimacy of the wholesale business, you can visit
the nearest government office to your home and office, and inquire if
the wholesale operator is truly licensed by law to do business.
What are the advantages and competative benefits?
Its better to transact with a wholesale distributor performing better
than its rivals than one who isnt. You dont necessarily have to transact
with the biggest wholesale distributor the big companies usually have
high volume requirements before they agree to any dealership but at
least with a company that has strong sales over the years as proof of
its capabilities.
Dealing with an inexperienced wholesale distributor can be disastrous;
as someone new to the business, a wholesale distributor is more likely
to commit faults, act inefficiently, and charge higher fees because
of higher operational costs. An experienced wholesale distributor, on
the other hand, not only has lower operational costs, but also may have
tax-exempt status that leads to lower market prices.
- Evaluate their financial situation
A wholesale distributor thats burdened with debts, unable to collect
its accounts receivables, and with low cash assets, is not the ideal
type to transact with. Such a wholesale distributor may be forced to
increase its rates to be able to handle its debts and improve its financial
situation.
- What do their warehouses look like? Are they in good condition?
Its important to take a look at the wholesale distributors warehouses,
if it has any. If the facilities appear to be neglected or run-down,
such conditions indicate that the wholesale distributor is not that
particular about the quality of the goods it distribute. Obviously,
goods of inferior quality are not sellable. If possible, know if it keeps an accurate
inventory of its goods as well. If you notice any discrepancies, this
simply means that the business is not being run efficiently. Thus, its
logical to assume that the wholesale distributor may not be an efficient
partner to deal with as well.
- Is there a large network of contacts?
A wholesale distributor will enjoy more sales with a large network
of contacts. As a client, you will also benefit from dealing with a
wholesale distributor with numerous contacts to depend on. More contacts
lead to more choices, and eventually, better rates. The wholesale distributor
will gain access to more manufacturing companies, and therefore be able
to provide you with lower prices for the goods youre interested in selling.
The network of a wholesale distributor is not solely made up of manufacturers
and retailers alone. A smart wholesale distributor is aware that its
also important to build strong relationships with the people it indirectly
transacts with, like retailers, labor organizations and public officials.
If its possible, try observing how the wholesale distributor interacts
with the aforementioned individuals. Keep in mind that when we say strong
relationships, this doesnt mean relationships based on bribery and corruption
is acceptable. It is not!
- What are their product policies?
What happens when delivery of goods are delayed? What happens if
the delivered goods have been damaged? Knowing the product policies
beforehand will give you an idea if the wholesale distributor will act
fairly towards you in future dealings. Make sure that any conditions
he does specify are included in your contract.
Trevor Marshall : For more great wholesale related articles and
resources check out http://wholesalehq.info
|
|
