the no B.S. guide to buying wholesale products for resale

You know what you want to sell.

You've done your research and know that a market for your product exists.

You have a reseller certificate from your state (easy to get, this enables you to buy merchandise without paying sales tax but also requires you to collect sales tax on sales you make in your state).

Now you have to find one or more wholesale product sources.

It's always best to begin by contacting the manufacturer directly. If the manufacturer does not sell directly to retailers, ask for the distributor's name and contact information and get in touch with the distributor.

If you can source your products locally through the manufacturer or their legitimate wholesale distributor, it's to your advantage. By working as close to the source of your inventory as possible you keep your transportation (shipping) costs to a minimum. Don't forget, when you price your product for resale, the cost of shipping that product to you must be figured into your selling cost. If you have to pay for the product to travel a thousand miles to reach you, that's a lot more expensive than going to a warehouse within driving distance.

Another advantage you gain by sourcing nearby is the ability to establish a more personal relationship with the distributor or manufacturer. You may be able to learn things that will help you improve your sales. And as your sales grow, you become more important to the manufacturer or distributor and develop more leverage with them.

If for any reason you are not able to make contact with a manufacturer or distributor (local or not), there are other steps you can take. These include attending trade shows and finding sources online. Keep reading!

Overstock.com has launched O.biz, a new B2B (business to business) channel. O.biz sells in bulk (e.g. case lots) at bulk pricing, so it is a good place to look for products you can resell.

Internet Retailer and Get That Wholesale teamed up to create what they say is "The World's Largest Guide to Online Wholesalers." You can judge for yourself. The site provides free access to a directory of more than 3,500 wholesalers and their B-to-B web sites and is organized into 59 unique supplier categories.

Visit site.

It's a very good place for a new seller to find merchandise, especially because smaller lots are often available. And it's called eBay!

But, eBay is huge, so get a little help from Where to Buy Wholesale. This web site has fine-tuned the experience of wholesale buying on eBay, was created by an experienced eBay seller, and might be just what you need to get started.

You can read Cover magazine online or in print. Either way, the magazine is free. It is aimed at independent retailers, wholesalers, kiosk operators, distributors, and closeout buyers and combines editorial content with advertisements for wholesale, closeout, liquidation, and other businesses. Read and/or subscribe at the Cover web site

WebWholesaler magazine is for online wholesalers, retailers, or store owners/buyers. It contains industry news, product trends, business strategies, tradeshows, and ads. For your free subscription, visit WebWholesaler.

Wholesale Central is a B2B (business to business) web site where you can research businesses that have wholesale, liquidation, and other products for sale. Its sister sites are Closeout Central, which posts new closeout listings daily and Wholesale Central Asia, a directory of Asian suppliers. Wholesale Central publishes the two magazines mentioned above.

Internet Retailer is not really about buying wholesale (it is focused on e-commerce), but if your plan includes selling online, it's worth reading. To see the magazine online or get your free subscription, click here.

Direct Manufacturer is a B2B website with company listings from all over the world. The USA section alone has nearly 1,000 companies listed. The listings vary from what appear to be totally legitimate wholesale suppliers to sources that are not quite wholesale, so carefully check any supplier you're interested in. More information.

Founded in 1999, Alibaba.com makes it easy for millions of buyers and suppliers around the world to do business online through three marketplaces: a global trade marketplace (www.alibaba.com) for importers and exporters, a Chinese marketplace (www.alibaba.com.cn) for domestic trade in China, and, through an associated company, a Japanese marketplace (www.alibaba.co.jp) facilitating trade to and from Japan. Together, its marketplaces form a community of more than 42 million registered users from more than 240 countries and regions. Founded in Hangzhou, China, Alibaba.com has offices in more than 50 cities across Greater China, Japan, Korea, Europe and the United States. More information.

Global Sources is a web site designed to help you source products and learn about supplier. You can check out suppliers' verification, compare supplier rankings, and more. One of their features is that you can download free e-magazines that contain new product profiles (including pictures and top-line specifications), insights into new development and trends in your industry, and updates on pre-screened suppliers in China and throughout Asia. The categories range from auto parts to telecom. To see what's available visit the Global Sources C2 e-Magazine download page.

If you want to learn about different ways to earn money (not get-rich-quick schemes) using the Internet, take a look at this lens I created:

How to make money online

These days, World of Good on eBay is the best place to look for wholesale suppliers of fairly traded, eco-friendly, and otherwise socially conscious goods. Visit the World of Good Trust Provider Directory

Maybe.

An online search for wholesale products of any type will return pages and pages of results, probably many more than you have the time or inclination to review. And a lot of those results will be for lists of wholesalers and require payment. Most of the information is unreliable, and in many cases, the contact information you provided will be sold to spammers and other unsavory characters, so it's best to avoid all of that.

However...

With the growth of eBay and Internet commerce in general, two companies have established good reputations for providing wholesale information in exchange for payment of one-time membership fees: Salehoo and WorldwideBrands.

I would love to give you more information about each of them, but Squidoo rejects this lens as "spam" everytime I include all of the details (and I don't feel like waiting up to 30 days for someone at Squidoo to review this lens "by hand"). So put dotcom at the end of each company name and go have a look at their web sites. In fact, even if you decide to find wholesale sources on your own, I encourage you to look at both of these web sites because they contain lots of useful information, especially for those just starting out.

What is dropshipping? In simple terms, dropshipping means that you sell a product but do not pay for it until you receive payment from the buyer AND you have someone else (the dropshipper) handling inventory and shipping.

Let's say you have a web site or an eBay store in which you sell green widgets. You list the green widget in your store and provide a description, photograph and price. I buy the green widget. When you receive my paid order, you inform the dropshipper, who then packages the green widget and ships it to me. The difference between what I paid you for the green widget and what you have to pay the dropshipper for all of this is your net. Sounds easy, right?

Well it can be easy, efficient, and effective. But it can also be a nightmare. If you do an Internet search for dropshippers you'll get thousands of results. Some may be from legitimate and reliable companies, but many won't be. Before you make any decisions about dropshipping, you must do your homework to learn if a company is legitimate AND if you can make a profit after all is said and done.

Legitimate dropshippers - most often they are distributors - offer the service for a variety of reasons. In some cases, they began because their customers asked them to or because they saw it as a way to help their customers get more product sold. Others dropship because it helps them get business might otherwise miss out on. In most cases, dropshipping is not their only model - they are distributors who have added dropshipping as one of a number of services offered.

When you use a dropshipper, you give up having complete control over your selling process. Some sellers find that a bit scary -- if a problem arises with the customer, it is the seller and not the dropshipper whose reputation is affected.

On the other hand, some items are best left to the dropshipping process. For example, if you sell a very large or very heavy product and carry the inventory yourself, you have to pay to have that product shipped to you, and that increases your cost and the end cost to the buyer. With dropshipping, you don't have that additional cost and can price the product more competitively.

If your budget is tight and you can't afford to pay to keep a large number of items in stock, a good dropshipping setup enables you to sell your products without tying up all of your capital.

To avoid getting ripped off by dropshipping scams, don't search for companies that promote themselves mainly as dropshippers. Instead, find a distributor of your product (see the Getting Started section at the top) who has added dropshipping to the list of services they offer to their customers. Here is an example of a reputable company that has adding dropshipping to the list of services offered to their wholesale customers. (I have no business relationship with this company.)