Product suppliers are crucial to the prosperity of your business, whether you’re trading through dropshipping, arbitrage, wholesale, or private label. You’ll risk running out of inventory if you don’t have suppliers, lowering your sales and profits! How do you recognize which supplier category is best for your e-commerce venture?
We’ll break down the boundaries between wholesalers, distributors, manufacturers, and closeouts in this report to help you choose the best supplier for your eCommerce marketplace. Then we’ll offer you some additional pointers on how to find the best supplier for you and your company!
Distributors are the most popular method of Amazon supplier. Distributors, to put it simply, are external customers who work exclusively with a product. Distributors do not make or produce any goods, but they usually work closely with the brand owner. A distributor who works with Nike purchases many products at affordable prices and then resells them for a profit.
Working with a distributor is ideal for small Amazon sellers and e-commerce enterprises because you don’t have to buy in bulk to get many high, name-brand products. Distributors will supply you with any number of items you require if you want to keep your stock small. You are not getting an excellent price for your inventory is one drawback of this model.
When should you go to a distributor for supplies?
If your company is short on cash or resources, distributors may be the best option for obtaining products. Distributors can help you get high-quality products without breaking the bank. If you have the resources, we strongly advise you to work directly with a manufacturer.
Manufacturers are the second category of suppliers. Manufacturers are businesses that control their manufacturing lines, design their products, and market themselves. If you’re looking to build stock, manufacturers are a fine place to begin. Because many manufacturers make various products, you can quickly access any of them and diversify your inventory.
The difficulty in landing a contract when procuring from a manufacturer is a standard stumbling block. Manufacturers frequently strike deals with stakeholders who can buy larger volumes of goods at a lower per-unit cost. Manufacturers may refuse to sell your products if they lack sufficient capital or purchasing power. If you have enough cash to buy a large number of products, manufacturers, like distributors, can sell you a large quantity of stock at a low cost per unit.
When should you go to a manufacturer for a product?
Manufacturers are an excellent resource for sourcing a variety of high-quality products if your company already has funds and room to store inventory. Working with a distributor may be the best option if you don’t have the money supply or assets to store large quantities.
Companies that deal with closeouts
The clean-up squad of the vendor world is closeouts. Closeout shops buy the last of a product’s inventory items from manufacturers and distributors looking to get rid of it. Because businesses and distributors are constantly trying to get rid of merchandise as soon as possible, closeout industries get the best prices and discounts.
Amazon sellers can get high-quality goods for discounted prices as closeout organizations get their interests for such a low price. Closeouts have the disadvantage of having minimal stock and inventory variation.
When should you use a closeout company to get supplies?
Suppose you have a limited budget and require a high-quality product at the lowest possible cost. This is also a good option for arbitrage and dropshipping retailers who need to move inventory quickly.
The last type of Amazon supplier is wholesalers. Wholesalers are a step behind the other three in the process because they buy their goods from manufacturers, distributors, and closeout companies and outsource them for an income at a better price. Many Amazon sellers and their businesses fall into this category.
There aren’t many advantages to buying from a wholesaler, especially if you’re already an Amazon Wholesaler. Wholesalers will charge a higher price for their goods than distributors and manufacturers. This means that sourcing from a wholesaler will cost you even more than sourcing elsewhere. Working with a wholesaler may be beneficial in some cases because wholesalers may have products that are still profitable.
When should you go to a wholesaler for supplies?
If selling their products is profitable for you. If you can get the same merchandise from a manufacturer, distributor, or closeout company, you might be able to get a better deal and increase your profitability. In these cases, sourcing from the other three significant sources rather than a wholesaler may be more advantageous.
You have all of the information and resources you need to find the ideal supplier for your company! So, what’s next? Go out and buy and sell! Choose the best supplier(s) from your chart, vet each, and submit a catalog request. When you get a catalog, do a thorough product assessment and determine the net profit for each possible item.
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