5 Ways to Avoid Wholesale Sourcing Mistakes

Whether you’re an e-commerce store, or a brick-and-mortar retail-chain mall, wholesale sourcing is one of the most important considerations you can make. Decisions you make around wholesale sourcing can have a notable impact on other areas of your business.

It’s essential to select the best products for your store. Slow moving products with a high price tag can lead to narrow profit margins that linger over you like a dark cloud. You also need to keep up with the latest trends, stay abreast of technological advancements, as well as keeping an eye on financial and logistical developments.

Keeping all this in mind during the wholesale sourcing process can be challenging. If you use a trusted and reliable wholesaler, things can be much less stressful. Here are some key ways you can avoid wholesale sourcing mistakes, enabling you to give your customers exactly what they want.

Think About Demand for Products

Touched upon previously, it’s best to avoid products that don’t sell quickly, since a lot of your capital will be tied up in them. A way to avoid this mistake is to consider the market demand for products you source.

You need to measure just how much people want to buy certain products – that’s the demand. Deciding which products to sell isn’t simply down to what you love or feel passionate about. First off, it’s a good idea to do some market research. If you have a certain target audience or niche, take a look at what is popular amongst them. Be sure to investigate the current trends to try to keep ahead of competitors. 

Speaking of competitors, you can research what is selling best for them. This will give you a strong idea of what your customers will enjoy buying, and what will turn you a profit.

By getting a clear understanding of market demand, you’ll be in a better position financially. This is because you’ll know which products to stock, and how many units of them. Meeting demand successfully means you won’t overstock, and waste capital, or under stock and miss out on sales opportunities.

Manufacturer vs Distributor

Wholesale sourcing presents different options. You could either source products from a distributor, or directly from the manufacturer. Each option has its pros and cons.

Sometimes, it can feel like doing things directly is better for business. Getting products straight from the manufacturer may seem like the simplest choice. However, there are a number of important factors to consider that might cause difficulties during the wholesale sourcing process. 

Manufacturers could be based anywhere in the world, meaning there could be a language barrier to overcome. Easy communication can save a lot of time and energy, and a language barrier could lead to damaging misunderstandings. Manufacturers also tend not to be too heavily involved in the sourcing process, meaning a lack of experience and expertise on their end. It’s common for them not to have a dedicated customer service team to handle inquiries or offer support. These factors, paired with potentially challenging logistics, make sourcing from manufacturers more risky.

On the other hand, distributors specialize in wholesale sourcing, and are much better equipped to help your business through the process. Usually, there will be expert customer service teams and account managers on hand to oversee things and guide you through. You can verify their authenticity by looking at reviews and checking their reputation, for peace of mind.

Keep an Eye on Inventory

Intimately knowing your inventory can help you meet customer demand, save capital, and run your business efficiently. When it comes to wholesale sourcing, this is one of the key ways to avoid mistakes.

Being aware of your inventory and stock levels enables you to only order what you need, as well as keep up with demand without delays. Having sufficient space and storage for products is important, so that receiving them is seamless. You shouldn’t rely on memory alone. Utilizing a helpful inventory software, like Katana or Zoho Inventory, can help track levels of stock in real time, so you’re never caught out.

Take Out the Guess Work

You might have gotten used to the way things work with certain distributors or manufacturers when wholesale sourcing. When dealing with a new company, it can be dangerous to assume that they will do things the way you are used to. 

Being explicit in your expectations and requests can save a lot of money and hassle in the long run. There are classic assumptions that, if made, could cause a serious headache down the line. For instance, if you purchase a product in bulk, do not assume that you will automatically be given free shipping. Equally, it’s wise to be clear about the state and condition of packaging the ordered products will arrive in. Doing this can ensure you don’t make any unnecessary packaging purchases, or are not left facing delays when products do eventually arrive.

Don’t Skip the Sample
If you’re organized, you can factor in time for samples before placing large orders. Taking a “try before you buy” approach allows you to check if the product is what you expected, and that you’re happy with the quality.

Like viewing a house before you put an offer in, reviewing a sample before bulk buying will save your business a lot of capital if, for some reason, there’s a problem with the product. The time it takes to order and receive product samples varies between companies. It’s best to get in touch directly with the supplier to request samples, and organize from there. Whilst samples may still cost money, it’s best to invest $200 on an inappropriate sample, than $2000 worth of that product.

Conclusion

Whilst there’s certainly a lot to think about during wholesale sourcing, it doesn’t have to be an overwhelming task. Staying organized and aware of what is going on around you, both within your business and the relevant market, can help you stay on top of things.

Working with a trusted and reputable wholesale company like DIG means a lot of the hard work will be taken care of. Avoid mistakes using the tips above, and continue to provide the best products that your customers will love.