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Wholesalers

A wholesaler per se is a middleman between products from a third source (typically a manufacturer) and a buyer (typically a retailer, online-shop or mail order company). Against other opinions, wholesalers do sell to other wholesalers, if the price level in the target market on the buying side is noticeable higher than in the target market of the selling part – referred to consumer prices. It’s not uncommon e.g. that a wholesaler from Germany sells Solingen cutlery to a wholesaler from the US so that he can distribute it to the US market if the US wholesaler doesn’t have access to the manufacturer itself.

The distributor as the special case

As a special kind of wholesaler, the distributor usually has licensed the wholesale of certain products in a specified area (e. g. a country), so that other wholesalers are excluded from this market. In this case, be sure to not violate any distribution permits from the manufacturer if you want to take part in this business.

Buying from wholesale: The legal perspective

There are huge differences in terms of the legal perspective when buying from wholesalers in contrast to buying from a retailer as a private person. The following passages may vary from country to country, but are common within the EU and Europe – these remarks don’t represent any legal advice, too – if you want one, please consult a lawyer.

One major difference is that you can’t easily cancel an order just because you want to – Sending an order to a wholesaler is a mutual contract that can only be cancelled if both sides agree to do so. So be sure that the items ordered from a wholesaler both fit in your budget and product assortment.

You can’t return ordered goods to the wholesaler, too, if they have been delivered to you and you don’t like them anymore. If the delivered goods match the original offer and order confirmation/invoice you can only appeal to the goodwill of the supply source you bought from. This leads to the advice to record every part of the buying process in written form that is confirmed by the seller.

We can only encourage you to inspect delivered goods immediately, optimally including the presence of independent witnesses, e. g. the forwarding agency staff that delivered the ordered goods. If products are missing, damaged or other products than offered have been delivered you have to complaint immediately to the wholesaler and you have to be able to proof the false delivery to secure your rights as buyer.

As a commercial buyer, you benefit from a homogenous legal basis when buying from EU wholesalers and comparable laws in other parts of Europe. Besides that, the unified EU currency – the Euro – eases transactions a lot since no currency exchange rates have to be considered throughout any country the Euro is currency.

Finding wholesalers

In our opinion, there are several common ways of finding wholesalers as a supply source for your business:

  • Participating on online wholesale marketplaces
  • Attending trade fairs
  • Searching in business directories
  • Searching in online search engines like Google
  • Talk with your business peer group
  • Etc.

Participating on online wholesale marketplaces like e. g. Wholesale.eu has several advantages, at first that typically immediately available in-stock products are offered that you can order directly. Transaction costs are lowered drastically, as a well-equipped marketplace offers price comparisons and the opportunity to skip the negotiation process with the wholesaler, since conditions and products are made clear from the beginning.

In contrast to this, trade fairs imply travel effort and costs, is time-consuming and stressful. On the other hand, well-established trade fairs offer a large variety of competent wholesalers and a quick overview over the offered product range – direct contact with sales staff included. If you are willing to carry out the effort or reside near to the location of a trade fair, this option is worth a try. An interesting thought: The more the trade fair is away from the location of your target market, the less competitors will attain this event – interesting opportunities for supply sources "for your eyes only" included!

Searching in business directories – online or print – offers the same online benefits as the mentioned marketplaces, but lack the benefit of distinct and available product offers. Typically, only a description or excerpt of the product range is published. That means that the need to inquire for detailed offers and the negotiation process still remains. This option is relevant for you if you don’t have a detailed product range in mind or if your demand lies way into the future. If the usage of a business directory is free, you should give it a try in any case to extend your supply base.

Searching in online search engines like Google is usually free of costs, so this is a good starting point for market research. Please consider though, that many of your competitors will do the same, so that a lot of market participants will start from the same point. If this research results in supply sources and wholesalers that offer goods that most consumer consider as "must haves", it’s worth the effort. Searching in Google will in any case give you a good sense of market language, representation of wholesalers and keywords to extend your search.

If you are a well-established market participant in your business, talking to your peer group is always benefitial to intensify business contacts. This communication might result in new supply sources or new wholesalers for your business, but be are of the fact that "gold nuggets" are rarely given away.

In our opinion, the more contacts to wholesalers you can generate at reasonable offer or cost, the better. A multichannel approach is the one we suggest, but the ROI (Return On Invest) has to be good for your business. A solid business plan and postprocessing of your efforts is essential in any of the cases mentioned above.