Slide 2:
Finding a wholesale supplier is a strategic task for a retailer. Much of a retailer’s business strategy revolves around getting the widest range of goods at the lowest prices for his customers. The wholesale supplier enables this at the back end for the retailer. Small retailers however find it difficult to locate good wholesalers. The primary reasons are small transactions and lack of financial muscle. To add to the complexity, there are thousands of rip off wholesalers who scam these unsuspecting retailers out of their money. However, as always, the fraudsters leave some clues. Here are the tell tale signs that should signal a fake wholesaler to you : Too Much Advertisement: Advertisement costs a lot of money. Wholesalers run on thin margins. Their businesses are primarily driven by volumes. Hence, if you come across a wholesaler who is advertising heavily over the internet and having his website optimized, be wary of them! A genuine wholesaler would not find it logical to spend huge sums on advertising when it is not the best way to reach their customers. In this business, customers find them through word of mouth publicity.
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Registration Charges: Only very established wholesale suppliers can ask for upfront registration charges. If you come across a “never heard of before” wholesaler and they ask you to pay to get enrolled in their scheme, be careful. In all probability it is a fraud. The best course of action is to avoid such deals. However, if you think you are dealing with a genuine wholesaler, conduct very careful due diligence. If they are overseas, just drop the idea. It’s just not worth the risk. Small Minimum Guarantees: A wholesaler will stock a lot of products in the anticipation that you will buy from them. What happens if you don’t? They go bankrupt. It is for this reason that they contractually oblige you to commit a minimum amount of purchases you will make each month. If you find these numbers too small, it means the wholesaler is bearing the risk. A wise wholesale r will never bear so much risk. It could ruin their business overnight. Hence, it most likely is a fraudster who is using small minimum guarantees as a bait to lure you in. Some will even justify this with the registration charges you have paid. In either case, hold on to your wallet.
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Too Much Variety: Wholesalers generally pick niches. A wholesaler that sells everything under the sun is hard to find. Now, this is not a matter of choice but of necessity. The business model requires wholesalers to stock products in large quantities. Assuming that they would stock 1000’s of units of 100’s of products, they would have huge inventory costs. On top of it they will require a huge warehousing infrastructure to store it. If you are not dealing with a major corporation, then the wholesale supplier is probably a fraud. Here, variety is used as bait. They will most likely tell you that you have to fulfill a minimum purchase commitment, but you have so many products at your disposal. This gives you the confidence, that you will easily be able to do so. It is this greed that makes retailers fall prey to such scamsters .
Slide 5:
Deep Discounts: True that wholesale suppliers can get you a lot of discounts but at the same time, if the discounts sound unbelievable, please verify. Quoting a percentage figure is not possible here, because different products have different discount norms. However, if you find someone who is way of the mark, be cautious. These guys often promise you prices at which it is impossible to manufacture the product. They will pose as offshore suppliers or agents to convince you on the benefits of low costs there . Selecting a wholesale r is a task which is pivotal to the success of the retailer. It must be done only after careful due diligence since its outcome can be long lasting. The bottom line of the company can be positively or negatively impacted by this choice. Be sensible and be realistic!
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