4 Crucial Tips to Ensure You’re Working with the Right Wholesale Suppliers

Retailers come in all shapes and sizes, from mammoth online companies like Amazon and massive brick and mortar stores like Walmart to agile startups that capitalize on niches not served by the big boys. 

However, all retailers need a solution to the quandary of merchandise sourcing. Put simply, where you get your merchandise matters a great deal. The wholesale trade segment of the economy is massive, and constituted 5.9% of the entire US GDP in 2016, more than construction or mining.

As a retailer, you have a number of choices available when it comes to sourcing your merchandise. You can work with regular wholesale distributors, or you could choose to work with wholesalers who are specialists in liquidation. Of the options, the latter is the better choice.

However, you do need to ensure that you’re working with the right wholesale suppliers. They’re not all created equal. Below, we’ll cover five crucial tips to ensure that you’re making an informed decision.

Cost Below Wholesale

The first area we’re going to cover is cost. Yes, you can buy at wholesale prices from distributors. However, that doesn’t mean that you’re actually getting the lowest prices possible. When you work with wholesale suppliers dealing with liquidation sales, you’re able to take advantage of very low prices. This is due to a number of different reasons.

Liquidation suppliers deal with retailers and manufacturers rather than working with distributors. This means they get first pick of products that fall into heavily discounted categories. These include things like overstock items that retailers need to get rid of while still trying to recoup some of the cash they invested. Others include discontinued items and shelf-pulls, as well as returns by customers. None of these items can be sold at the price of a new product, so you’re able to get deep discounts, often paying just pennies on the dollar.

You’re then able to turn around and sell those products at a considerable profit to your own customers. In many cases, you’re able to charge the full MSRP, or slightly less. In the case of refurbished items, they can be sold at a lower cost, but can still provide you with a great deal of profitability.

The Right Quantity of Merchandise

Not all wholesale suppliers offer the same quantity of merchandise. Some require you to buy in very large bulk orders. That’s often not the right decision for a retailer, particularly a smaller company with limited shelf space on the sales floor and little storage space in the backroom. It’s a better option to work with liquidators that can offer you quantities ranging from pallets down to cases and even single purchase items.

Mixed pallets are also excellent options. These allow you to purchase a pallet of products from a single category (consumer electronics, health and beauty, sports and fitness, for instance), but doesn’t require that the entire pallet be made up of the same product.

So, rather than a pallet full of the same item, which could very possibly sit around and gather dust in your store, you’re able to stock a myriad of different but related items in your store. It’s an excellent way for smaller retailers to offer their own customers a wide variety of merchandise without breaking the bank in the process.

Brand Name and Generic

In quite a few instances, brand recognition is an important consideration for your customers. However, that’s not always the case. It’s very dependent on your customer base, the type of store you run, and even the product in question. For instance, even a store that specializes in higher-end electronics can benefit from purchasing a lot of generic, or low brand recognition merchandise to use as loss leaders or sales incentives.

With that being said, not all wholesale suppliers offer the right mix of brand name and generic products. It’s important that you’re able to choose between the two to ensure that you’re delivering what your customers expect.

For example, you might be able to find generic health and beauty products like multivitamins, but would your customers actually purchase them if they weren’t familiar with the name behind the product? More and more consumers are realizing that quality matters when it comes to these sorts of products, and that brand names are usually of better quality than generics, so they will gravitate towards a multivitamin from a name they know and trust.

That’s not true in all areas, though. For instance, in the world of consumer electronics, you have two defined camps of consumers. You have those who would never buy anything but a brand name product and generally shop with just one or two manufacturers. Then, you have a second camp who will buy generics or low brand recognition products as long as the product offers the functionality they expect.

You’ll need to determine what your core customer base expects in these areas and then shop for products accordingly. However, having access to both brand name and generic products ensures that you’re able to source merchandise that fits your customers’ needs and expectations.

The Right Purchase Method

Finally, let’s touch on the way you purchase from wholesale suppliers. While you’ll find some companies that offer only outright purchases, the better choice is usually to work with an auction liquidation company. There are quite a few reasons for this.

First, most auction sites combine the ability to bid with the opportunity to purchase the lot outright if you’d prefer not to wait. Second, you’re often able to drive the price of your merchandise even lower by using an auction site strategically.

Of course, you do need to make sure that the company you choose has a simple, transparent bidding process. You’ll need to know the reserve on the auction lot, as well as other important details to make an informed decision about whether you should bid, wait, or search for another lot to buy.

In the end, working with liquidation auctions ensures that you have access to the lowest prices, the right merchandise, and the options you need to run a successful retail business.

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Henley Johnson

Henley currently works as a sales representative for Direct Liquidation, assisting businesses with product sourcing of liquidated merchandise from the largest retailers in the world. Whether you are looking for a pallet or a truckload Henley is here to help you grow your business.

View Henley’s Bio on YouTube.