Unless you are planning to make your Shopify products yourself, such as jewelry or artwork, you are going to have to obtain your inventory somewhere. This can be challenging because not only do you need to find a reputable and reliable supplier of the inventory that you sell, you also need to be able to purchase it at a low enough price that you can make money on the product – commonly called buying wholesale. Buying wholesale is usually a lot easier if you are buying in bulk, and for a smaller e-commerce website, this might not be possible, particularly if you are selling big-ticket physical products like electronics.
Of course, there are digital products to consider as well. Digital products can be a huge part of your income, particularly since if you create them yourself, you can sell them with no overhead whatsoever. Then, there are subscription products to consider, which might be something you add to your store if you have a valuable service that people are going to pay for month after month. But as far as obtaining products, let’s start with where you can get your physical inventory.
Obtaining Items Wholesale
When an item is manufactured, ideally, it would go straight to retailers and then they could add their markup and sell the item in their store. Unfortunately, it doesn’t happen like that at all. What happens is that the manufacturer sells it to a distributor, who then sells it to a wholesaler (or vice-versa) who then sells it to the retailer, if you’re lucky. There may even be more middle-men with their hand out along the process and so the price can get pretty high by the time it gets to you.
The big stores like Walmart do enough business that they can skip a lot of steps and buy directly from the manufacturer. That’s why they can offer their customers such low prices and be able to undercut the competition. But as an e-commerce website without any real clout, especially if you don’t have the money to buy in bulk, you are going to be buying close to retail on some things.
Some wholesalers won’t sell to you unless you purchase a certain amount and others may not want to deal with you at all. Retailers often spend years building relationships with their suppliers to make sure they get the best price possible.
Where to Look to Buy Items Wholesale
If you want to buy items wholesale, you need to understand who the players are in your area. The wholesale industry has 50 of the biggest distributing companies generating a quarter of the income in the entire industry. The world of wholesale is a small one and there is a definite distribution chain that wholesalers supply through. It is a club that you have to have an invitation to be a part of.
At the highest level are the manufacturers who take the raw material and turn it into a product, or the import companies who buy it elsewhere and import it to the United States. Those companies then sell it to wholesalers or distributors responsible for a region, and who distribute the product to the retail stores in that area. Some brokers are the go-between of small retail businesses and distributors.
Volume & Relationships Mean Discounts
When it comes to getting the best price on items, you need to have one of two things, and probably both. You need to be buying large volumes of products, whether that be many items of the same product or just a large order, and you need to establish a relationship with your wholesaler.
If you have been working with the same wholesaler for any length of time, you will begin to build a relationship, and that relationship will ensure that you get a good price down the road, even if you aren’t necessarily buying as much inventory as they’d like to sell you, as they want to keep in your good graces.
Since you’re new, it is unlikely that you’re going to have a relationship with the supplier so you’re going to have to work towards it and make up for it by buying in bulk as often as you can. Even so, there are wholesalers who will sell and ship to small businesses if you look for them.
You may not get as good of price from these wholesalers but as you become more and more well-known in supplier circles you will be able to move up the ladder to get to a better supplier.
Where to Look for Wholesalers
The best place for you to look for wholesalers these days is probably the internet, as you don’t know anyone outside of the web that you can call. There are wholesalers who list online and market themselves to businesses via the web. There are also trade associations and directories that you can make use of like Wholesale Central.
One way that you can go about finding the right supplier online is to find a store that sells some of the same products that you do and shoot them an email to ask for a recommendation. They may not wish to help you if they are a competitor of yours, so try to find someone who you’re not competing with.
Other than the internet, you can find wholesalers by attending trade shows. There are dozens and possibly hundreds of trade shows that have wholesalers attending them and if you can attend you may be able to get a supplier that you wouldn’t have ordinarily had access to.
You can also read trade magazines, particularly the classifieds section, to find wholesales that supply your particular product. You can also get recommendations from business organizations like the SBA, Small Business Development Center and the local chamber of commerce.
You might also want to try talking to the manufacturer. Although you probably aren’t going to get them to sell you products at the prices they sell to wholesalers, they might give you some recommendations of the people farther down the supply chain that serves small businesses. Another great idea is to visit retailer forums, particularly those for e-commerce. Of course, there is always the Amazon affiliate program as well.
Getting Digital Products to Sell
Depending upon what the digital product is that you are planning to sell, you can almost always make good money on them. You might have heard of Clickbank as the digital marketplace for sellers and affiliates.
The problem with ClickBank products is that they are often overpriced because the creator doesn’t sell that many and has to be an affiliate commission whenever they do sell something. However, Clickbank isn’t the only game in town.
Figure out what sort of digital product that you’d like to sell, and whether you plan on providing that digital product yourself or whether you plan to be an affiliate for someone else and then search the internet for products that fit your needs. You’ll probably have to do some real research because once you find a product, you need to vet it carefully, but soon you’ll have some digital inventory to sell.