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Proven Techniques that Top Retailers Use to Connect With REAL Wholesalers:
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In my line of business, I often hear from business owners who are just starting their online retail businesses and searching for wholesale distributors of the latest merchandise from the most popular brand names. While the desire to sell the top brand name products is understandable, it's often unrealistic unless you have a substantial amount of capital to invest in your business.
This is not to say that every prospective retailer should just throw in the towel. New business owners just need to understand the reality of the consumer goods industry, the abilities that they have based on their account balance, and then design their business plan accordingly.
Popular Brands Work Hard to Protect Their Reputation
First, let's consider the operations of the most successful companies in the consumer goods market. Companies with highly popular brand names have worked hard to establish these brands. Understandably, in order to protect the reputation of their brand names, they often establish strict controls in their distribution channel to ensure that their name is not compromised by association with a sub-standard retailer. (continued below)
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Authorized Retailers Only
Many of them directly control their distribution channel and only sell their products to authorized retailers who have met their application requirements. Their requirements for authorized retailers often include:
- A substantial minimum sales volume
- A physical presence, not just an online storefront
- An established history of retail sales and an exemplary credit rating
- Strong recommendations from other vendors with whom a business has dealt
No Distribution to Any Private Retailers
Some brands don't allow private retailers to resell their products at all. Companies who operate in this manner may own their own retail shops and online retail websites. This is rare, but there are still some companies who operate like this, not allowing any independent retailer - large or small - to carry their products.
Strict Requirements of Wholesalers
Many brands don't directly control their distribution channels, opting to allow wholesalers to handle distribution to retailers. However, even if they don't directly control distribution, they still may establish policies that their wholesalers must follow. These policies may be very similar to the policies often employed by brands that directly control distribution, employing one or more of the following requirements:
- A substantial minimum sales volume
- A physical presence, not just an online storefront
- An established history of retail sales and an exemplary credit rating
- Strong recommendations from other vendors with whom a business has dealt
Do Your Research. Call the Manufacturer.
Companies who operate their distribution channels with any of these levels of control will most likely not allow small volume wholesale purchases, eliminating distribution to start-ups with limited capital. Some of the biggest names fall into this category. Levi Strauss, Louis Vuitton, and Apple Computer are three such companies, but there are many more.
If you want to sell a specific brand name, the best advice that I can give you is to pick up the phone and do your research directly with the source. Call the company's sales or public relations department and inquire about their distribution policies before putting forth a lot of effort searching for their products through wholesalers. You'll potentially save yourself hours of wasted time. Not to mention, if you happen to meet the requirements for establishing a direct relationship with the manufacturer, there is no better place to obtain your products than directly from the source.
The majority of new online retailers don't have an endless source of investment capital that would allow them to meet the reseller requirements of the biggest manufacturers. For those businesses, the newest merchandise from the most popular brands may not be an option. However, that doesn't mean that the dream of owning an online retail store is out of reach.
In my next article, I'll look at options that are available for the regular Joe. Until then, do your research by calling manufacturers to inquire about their distribution policies, and, as always, good luck in all of your business ventures!
Product Sourcer Article Series One:
Proven Techniques for Contacting Wholesale Distributors and Dropshippers
Edition Two - Steer Clear of Wholesale Harry's Super Drop Ship Wholesale Emporium
Edition Three - Find Real Wholesalers Among the Fakes
Edition Four - Finding Wholesalers through Retail Industry Associations
Edition Five - The Reality of the Wholesale Market
