Many home based business owners are under the false impression that to buy a wholesale product means you should be able to source the product directly from the product manufacturer.
That premise is totally wrong.
Manufacturers are not in the least bit interested in selling their products a few cases at a time, to hundreds or thousands of retailers.
Manufacturers, by definition, are strictly interested in making products for the market.
Wholesalers operate in a service industry that consists of warehousing, operating sales forces, logistics and support offices, merchandising and delivering products to retailers.
Wholesalers are the bridge between the manufacturers that produce large numbers of product and the retailers who sell the product piecemeal, several units at a time or in bulk to the end user or consumer.
As a general rule, wholesalers are the source where manufacturers require you to purchase your products from. However, there are exceptions.
Occasionally, some manufacturers under certain conditions and for various reasons, will sell their product directly to retailers.
Usually, this is done because of the lack of brand recognition.
Because warehouse space is so costly and the business itself is a high volume, low profit industry; wholesalers require a fast turnaround in order to be successful and make money.
That is why wholesalers do not like to stock their warehouses with products that are relatively unknown to consumers or have zero brand recognition.
The turnaround times are usually too long for the wholesaler to make significant profits on lesser know products.
Because some of the smaller manufacturers of unknown brand name products often have a difficult time getting wholesalers to distribute their products; they will often sell directly to retailers.
As an online wholesaler, you must be careful working with small manufacturers, especially during the holiday seasons.
Smaller manufacturers are notorious for going out of business without a moments notice.
They can unexpectedly run out of stock when you're trying to fill an order and put your business in a seriously embarrassing position.
Internet business marketing solutions for dealing with small manufacturers vary, but in general dealing with small manufacturers is great for home based businesses who specialize in selling off brand products online.
The two things you must do in order to circumvent any potential problems is to:
- Develop and maintain a decent working relationship with your manufacturer
- Keep in touch with the manufacturer on a daily basis if possible to alert you of any potential problem areas.
- Try to forecast large orders and place them well ahead of the holiday buying season.
- Make sure that you have sufficient stock ordered for the products that move well.
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