If someone is planning to start a new business in the retail world, this person has to find reliable and legitimate suppliers of the wholesale merchandise. Wholesale distributor is a good option here. Distributors is the company that distributes wholesale merchandise to the retailers or wholesalers who buy from them with the intention of reselling.
A distributor buys directly from the manufacturers at lower cost by bargaining and negotiating a price which can give them good profit. Once the purchase is made, they integrate these products into a number of other related products available in their inventory. After that wholesale distributors contact retailers and offer them special deals on increased prices which enable them to make a good profit.
Most times, you can find allot of information about the manufacturer, but allot of times, there isn't allot of information out there on the wholesaler, because you are dealing with a middleman at this point. This creates a counter party risk for your business. This is where your due diligence comes into play. You have to make sure you are dealing with a professional middleman, and not a scammer.
Scams are very prevalent nowadays and anyone who is not familiar with the wholesale business can easily become a victim. Dealing with an illegal distributor results in waste of time, cost, and efforts. So, you need to check out the legitimacy of wholesale distributors before making deals with them. Let's get into some ways you can verify the legitimacy of your wholesale middlemen.
First of all you should search out the complaints filed against the company. You can call the business bureaus or you can also search through the internet. The internet will definitely let you know the scams or the cheats the wholesale distributor has made with his previous businesses. When people get cheated, they get loud online.
Surfing on the internet will help you to identify the complaints or the mistakes of the distributor. You can also search the legitimacy of the wholesale distributors from different articles, press releases, blogs and forums. You can find out previous law suits charged against the distributors by referring to the courts or legal authorities.
You can check out where the domain is registered. Verify that the distributor's domain is listed in the same country where they are located. You can also make calls to the previous and current clients of the distributors before making any deal.
Legitimacy of a wholesale distributor can also be checked by investigating addresses. Take their physical address and put it into a search browser or Google Maps because sometimes fake addresses are given to prove legitimacy. You can also prevent your self from getting scammed by giving trial orders to them initially. Don't trust anyone at at first glance, no matter how much all the other signs tell you they are legit.
This goes for all kind of middlemen in the retail world, including dropship companies. When dropshipping hit the scene, there were allot of companies that wanted in because it is the easiest way to start an online retail business. Dropshippers are middlemen that handle all of the warehousing, packing, shipping, and returns for your business. Many of them have tools that can also connect directly to your account.
But you want to make sure here as well that you are dealing with someone with a good reputation. You want to find someone that is dealing directly with the manufacturer, like Zendrop, where you can get better deals on products and shipping. Or, like with print on demand products, find a company like Printful that handles the manufacturing as well!
Beware of anyone trying to sell you a subscription or a guide that links you with dropship companies. These can be really scammy and you pay allot of money for resources that you could have found yourself for free on the internet with a simple search.
Starting an online, or even physical retail business is not as simple as just finding good deals and flipping for profit. There is allot of research that needs to go into your suppliers, especially if you are using a middleman. My advice is to go directly to the source, or if you want to dropship, then find a dropship company that works directly with the manufacturers.
It's a cruel world out there, so protect you and your assets, and stay away from scammers! Take some time do do some simple research and you can save yourself a world of headaches later on!
Keep calm and Hustle on!
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