Retailing is big business. If you have set up your own retail business where you buy items from trade suppliers and resell them, either online or in a brick-and-mortar store, you need to know that your wholesaler is trustworthy.
Unfortunately, many new retailers fail to conduct a due-diligence check on their trade suppliers and end up spending money on poor quality goods – or even worse, goods that never arrive at all.
So what can you do to check your potential wholesalers and trade suppliers? Here is a short list of 10 things you can check to be sure you don’t end up on the wrong side of fraud.
1. Check The Wholesale Forums
You have at your fingertips a wide array of resources right here in this forum. Search our postings and comments. You may find that others have posted a great (or bad) review about your potential wholesaler. Head over to the forum and register an account if you haven’t done so already.
2. Double-Check Wholesalers’ Prices
Many wholesalers will list a potential retail price for their items and then their wholesale price. But some wholesalers give you an inflated potential retail and try to make you think their wholesale pricing is a deal. If you’re not sure, always check with the manufacturer. Use their website. Check other online retail sales. Find out if your wholesaler is accurate.
3. If Is Sounds Too Good To Be True, It Probably Is
Don’t be afraid to walk away from a potential trade supplier if their prices for quality and reputable items are too good. It is likely the items have a flaw, but the wholesaler is trying to sell them regardless.
4. Avoid Wholesaler Brokers
You want to get the absolute lowest wholesale price for your items. A wholesale broker will add that much more to your total cost, and many times they are secretly working for a specific wholesaler.
5. Don’t Pay for Dropshipping Directories
These are usually years old, and out of a long list, you may only get a few actual numbers that work.
6. Avoid Dropshippers Pretending to be Wholesalers
Much like #4, avoid suppliers that may inflate the true trade price. A lot of these will pose as dropshippers and whilst there is nothing wrong with a dropshipper, they are a specific service provider, pretending they are in fact a wholesaler is simply wrong and only inflates pricing.
7. Know the Manufacturer and Factory
An outfit that says they are a manufacturer will have a physical location, an audit of this factory and the business would be a good idea if you are sourcing in China. There are self proclaimed agents that pretend to be the manufacturer but are actually thieves in waiting.
8. Get Business Registration Proof
Wholesalers are usually registered companies. Always check to verify that your potential wholesaler is legitimate registered and their information matches that on their registration with Companies House here in the UK.
9. Avoid Trade Suppliers Using Only Western Union or MoneyGram
These are likely scams. A legitimate wholesaler should not accept MoneyGram or Western Union, which are wire services designed for sending funds to individuals you know. They are not typically utilised for business transactions.
10. Buy a Sample Product
Ask if you can purchase a sample product from their inventory. Be sure that they sell exactly what you want to resell – and that they really have good quality inventory to supply to you.
Unfortunately, many new retailers fail to conduct a due-diligence check on their trade suppliers and end up spending money on poor quality goods – or even worse, goods that never arrive at all.
So what can you do to check your potential wholesalers and trade suppliers? Here is a short list of 10 things you can check to be sure you don’t end up on the wrong side of fraud.
1. Check The Wholesale Forums
You have at your fingertips a wide array of resources right here in this forum. Search our postings and comments. You may find that others have posted a great (or bad) review about your potential wholesaler. Head over to the forum and register an account if you haven’t done so already.
Many wholesalers will list a potential retail price for their items and then their wholesale price. But some wholesalers give you an inflated potential retail and try to make you think their wholesale pricing is a deal. If you’re not sure, always check with the manufacturer. Use their website. Check other online retail sales. Find out if your wholesaler is accurate.
3. If Is Sounds Too Good To Be True, It Probably Is
Don’t be afraid to walk away from a potential trade supplier if their prices for quality and reputable items are too good. It is likely the items have a flaw, but the wholesaler is trying to sell them regardless.
4. Avoid Wholesaler Brokers
You want to get the absolute lowest wholesale price for your items. A wholesale broker will add that much more to your total cost, and many times they are secretly working for a specific wholesaler.
5. Don’t Pay for Dropshipping Directories
These are usually years old, and out of a long list, you may only get a few actual numbers that work.
6. Avoid Dropshippers Pretending to be Wholesalers
Much like #4, avoid suppliers that may inflate the true trade price. A lot of these will pose as dropshippers and whilst there is nothing wrong with a dropshipper, they are a specific service provider, pretending they are in fact a wholesaler is simply wrong and only inflates pricing.
An outfit that says they are a manufacturer will have a physical location, an audit of this factory and the business would be a good idea if you are sourcing in China. There are self proclaimed agents that pretend to be the manufacturer but are actually thieves in waiting.
8. Get Business Registration Proof
Wholesalers are usually registered companies. Always check to verify that your potential wholesaler is legitimate registered and their information matches that on their registration with Companies House here in the UK.
9. Avoid Trade Suppliers Using Only Western Union or MoneyGram
These are likely scams. A legitimate wholesaler should not accept MoneyGram or Western Union, which are wire services designed for sending funds to individuals you know. They are not typically utilised for business transactions.
10. Buy a Sample Product
Ask if you can purchase a sample product from their inventory. Be sure that they sell exactly what you want to resell – and that they really have good quality inventory to supply to you.
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