Tuesday, July 5, 2016

Turnover Tuesdays - Look for Distributors/Manufacturers

For those who are not familiar, I started a series a while back called Turnover Tuesdays. Every Tuesday I like to highlight one item that I have resold. This will include profitable and non profitable sales. I hope that there is always something to learn.






As I mentioned in week 55, I've been increasingly looking for replenshible deals rather than chasing sales.  I still chase sales all the time but that's to increase my income.  The amount of time I spend on sales far outweighs replenishibles but my income is far more from sales since I don't have enough replenishibles.


One of the best ways to find replenishibles in my opinion is to have relationships with distributors or, even better, directly with manufacturers.

Dealing with distributors is a bit different than buying items from Walmart, Target, Staples and the like.


Positives with Distributors/Manufacturers



  • Harder for others to find the same deals at your cost.  Most people don't have deals with distributors (or at least your distributor) so they probably can't get the same items as you or aren't looking for them.  That means there is little competition on "your" listings.  Sometimes I am the only seller on the listing.  That's nice when it is a good seller but it's unusual.  Sometimes it is just me and Amazon.  That's not as good, but it means others probably won't be undercutting the price and profitability.
  • They don't mind resellers.  In fact, they are only selling to resellers.  Sometimes they want to only sell to larger companies and don't have time for you but when you find one that is happy to sell to you they will continue to sell to you.  They want your business.  No more banning!
  • They don't usually put quantity limits on items and sometimes, if you buy larger quantities you can even get a larger discount
  • Prices can be great.  Distributors are selling to resellers who need to make a profit themselves so they sell at prices that make sense for resellers.  That doesn't mean prices are always good.  Most items I've looked through actually are not good but you wade through enough items, you'll find something.  Manufacturers can have even better prices than distributors since you are cutting out the distributors.




Negatives




  • Sometimes distributors/manufacturers have minimum purchase requirements.  One particular distributor requires me to purchase $1,250 worth of items to have free shipping.  Another requires $10,000!  That's quite a bit.  Sometimes there is annual minimum purchase requirement.  That same distributor requires annual purchases of $10,000. Again, that's a lot to maintain.  If you only find a couple of items you want to sell you many not be able to hit those numbers. 
  • Sometimes they don't want to sell to Amazon sellers specifically, especially if Amazon sells the brand.  Most likely Amazon is a big customer of theirs if Amazon purchases so they wouldn't be eager to shake up that relationship.  That being said, one distributor actually gave me a discount because I sell on Amazon.  They wanted to increase volume.
  • You might be receiving pallets.  You have to be prepared to deal with that.  I don't recommend that going to your home/apartment.



  • Every distributor I've talked to requires a reseller certificate before they are willing to sell to you.  You'll need to be able to fill out that form which will likely require you to register your business with your state and sales tax authorities.  
  • No shopping portals :(
  • You probably won't get category bonuses, but one distributor I work with does actually have a category bonus

Start looking for distributors, you might find the exercise to be quite enriching.
Posted by Oren at 11:14 PM
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