What Wholesalers May Want To Know
Wholesalers will want to know a number of specific things about you and your business before being willing to deal with you. In many cases you may not meet the criteria required to deal with them at all. You should be prepared with the following information and be honest with them about it. There is no sense getting an account opened with a supplier only to have it closed when they check and find you are not who you said you were.
Do you have a tax ID number and/or business license? In some states it's called a retail sales tax number, in some states these are two different things and in some there is only one. The sales tax number or ID is usually issued by the state and the business license may be issued by your city, town, or county. You will almost always need a sales tax ID number to deal with a wholesale supplier.
How do you intend to sell their products? You may think this should be none of their business but how you intend to sell their products, ie: in a retail store, at flea markets or shows, or online, is going to reflect on their reputaion and some suppliers will, therefore, not allow you to sell in certain ways. Some will only sell to you if you have an actual retail store location. Always tell them the truth. If you sell on eBay then say, "I will be selling these items on eBay." If you have your own website say, "I have my own website where I will be selling." And if you do craft shows, flea markets or home partiess, say so.
For many companies eBay has developed a bad reputaion and they won't let you sell their products on there. If they discover that you are selling on eBay they will immediately close your account. You might as well find out up front, rather than finding a product that sells well and losing it.
Do you have credit references? Some suppliers will only deal with you if you can provide valid business credit references, often from other known suppliers. This is difficult if this is the first supplier you are trying to deal with. Others will accept your personal credit history or personal references. Often this requirement is for opening net 30 accounts which means they ship the order to you with no money up front, send you a bill for it, and expect payment within 30 days. You can often say that you can provide references but you don't want to open a credit account as you prefer to pay in advance by check or credit card at the time you order. Most companies will gladly accept this.
You can use your cash-up-front method to establish a history with that company and later, say six months or a year down the road, switch to a net 30 account. Then you can use that company purchase history as a reference when applying to another supplier. It takes time but if you work at it and keep your accounts paid you can develop a good history that opens doors for you.
Are There Questions You Should Ask?
Of course there are. And here are some you might consider if the company doesn't automatically offer the information on their website or in your conversation. Of course you should thoroughly go over their website first so you won't be asking things you should have found already.
* What is your minimum order?
- Is this only for the initial order?
- Do you have a print catalog? (if you want one)
- Do you have a website? (if you haven't found one yet)
- What are your shipping charges and how are they calculated? (by weight or dollar amount)
- How long after I order are items shipped?
- What is your returns policy?
- Will you be at trade shows in my area?
- What are your order requirements at trade shows?
Catalogs and Websites
Some companies charge for catalogs. Some will give you a voucher against the cost of the catalog that can be applied to your first (or next) order. Some will give you a catalog free with your first order and some will just send you a free catalog when you ask for it.
Some companies allow orders direct from their websites which can make the order process quite easy. Some offer discounts on their website and even low prices on discontinued items that you won't find elsewhere. It's a great idea to check out a supplier's website regularly.
Many suppliers show their products at trade shows. Suppliers will gladly tell you when and where the trade shows they plan to attend are being held and, if there is one close enough, it can be well worth attending. Often new products are introduced at trade shows so you can be among the first to offer them. Special pricing and/or less restrictive ordering procedures often apply at trade shows. Be sure to have the right paper work you will need to place on the spot orders. Business cards are a must. Some suppliers will add you to their mailing list and let you know whenever they will be at trade shows in your area.
How Much Should You Spend On Inventory
There is no good answer to this but you do need to be careful not to over spend. Whether buying from a catalog, on line, or at trade shows, don't be taken in by the glitter and glamor. Don't over spend. You need to set limits for yourself and stick to them. What I call the "candy store syndrome" can easily take over and you find yourself buying one of these, two of those and a dozen of... and pretty soon you are in over your head. Start small and be sure the items sell okay first. Don't let glib salesmen talk you into buying things you don't need or spending more than your plan.
Never spend more than you can actually afford. Even if they allow net 30 purchases at the shows, and they often do, that bill will come due faster than you expect. Don't count on selling enough of what you purchase to pay for it.
(continued in part 3)