A supplier in e-commerce is who gives you the products to sell. You buy the product at wholesale price and sell at a mark-up as is usual in business. Unfortunately since the internet doesn't allow you to physically meet your supplier there is an element of trust involved in striking up a deal with an unknown supplier. Not only is there the chance they won't even get the products to you/your customer but also their prices might not actually be wholesale price.
Unfortunately the internet has become full of middle men - these are the people you want to avoid in e-commerce. What middle men do is buy a whole heap of products from a real wholesale provider, and sell them at an increased price acting as a "wholesale provider" By using one of these suppliers your profits instantly drop massively. There are several ways to spot a fake wholesale supplier.
- They advertise their prices - basically all real wholesalers do not disclose the pricing information to the public.
- They charge money for their service, again most wholesalers are free to sign up with, but there are exceptions.
- It looks fishy - pretty much instinct, like any other online scam it's probably quite obvious. Over advertising, huge promises of wealth etc.
Types of Wholesalers
Once your past the scams there are 2 main types of suppliers that can aid your business. Depending on the size of your business and your initial capital, different types of suppliers will suit you better.
Drop Ship Wholesaler
These suppliers are becoming more popular, but are harder to find. Drop Shipping means that a supplier will ship for you, all you need to do is take the orders from your website, and send the orders to your supplier who will then dispatch your product directly to the customer. This means you don't have to hold stock, and there is no risk involved. The process simplified is
Customer orders from and pays your website > You send orders to your supplier > Supplier sends Products > You pay supplier for product + Shipping.
The money you make is the difference between what you pay your supplier for the product + shipping costs, and what you sell it for. It's true there is a little less profit to be made with drop shipping but as a start it's a lot easier and less risky than holding stock.
Light Bulk Wholesalers
This is where you buy the product in bulk or light bulk before you sell it. Buying in bulk means you save a lot more money and therefore have a lot of profit to make compared to drop shipping. There's a few more wholesalers in this category, and in general they're easier to find, which is always nice. The process for this is
Buy products from supplier > Take orders and payment on website> Ship products to customers.
It takes more effort than drop shipping and there's more risk. But it has better potential for earning.
http://www.aboutonlinebusiness.net has links and reviews of real wholesale supplier directories and free advice
http://www.aboutonlinebusiness.net has links and reviews of real wholesale supplier directories and free advice
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