The Best Way To Find Vendors For Your Online Store

The number one question that I receive from readers who want to open their own online store is how to go about finding vendors and suppliers. Do I purchase wholesale? Should I drop ship or should I contact the manufacturer directly?

When my wife and I first started our online store, we faced these exact same questions. But having done a fair amount of research on each of the above options, I’d like to talk about our experiences and our take on each of these ways to stock merchandise for your online business.

While our experiences are primarily related to wedding linens, what we are about to tell you should apply to almost anything that you choose to sell in your online store.

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Photo By Slapjack

Drop Shipping

Most people fall into the trap of getting excited about drop shipping when they first open their online store. Drop shipping seems appealing for several reasons. For one thing, you don’t have to stock any items. Whenever an order comes in, you simply place the exact same order to the drop shipper and collect the profit based on the difference in selling price.

There is no inventory, no fulfillment obligations and all you have to do is take orders. Sound like a dream come true?

What most people don’t realize is that the profit margins often suck and you have to provide customer support for problems that are completely out of your hands.

What if the drop shipper screws up the order or ships the product late? What if the drop shipper routinely ships faulty items? Guess what? You have to deal with all of these issues even though they aren’t your fault.

Couple that with the fact that the profit margins are extremely small and you have a situation where you are sacrificing your mental health over things beyond your control for very little money.

Even if you manage to find a reliable drop shipper, customer issues will still pop up and it will be much harder to deal with them when you don’t have control over your products. In a nutshell, you are staking the reputation of your business on a 3rd party that may not have your interests in mind.

Honestly, I’d rather simply become an affiliate rather than drop ship. This way, you take your cut and you’re done. No hassles. The main thing drop shipping is good for is to fill in gaps in your overall product line. I would never base my online store solely on drop shipping.

Buying Wholesale Domestically

I hear the word ‘wholesale’ a lot. Many people contact us about wholesale pricing and where to find wholesale products. The term ‘wholesale’ seems to imply that the price that you are going to get is going to be the lowest that you can find.

Well guess what? Nothing could be further from the truth. When I was shopping for vendors for our online store, all of the “wholesale” dealers in the US were offering extremely high prices. Sure, they were cheaper than MSRP, but the prices were sufficiently high that the profit margins would have been on the low end for the products we wanted to sell.

To make things worse, there were already a large number of competitors carrying the exact same items in their stores at rock bottom prices. So why buy from a wholesale vendor in the US?

Because practically nothing is made in the United States anymore, wholesalers take care of all the hassle of importing and warehousing the goods from the manufacturer. You don’t have to travel to a foreign place. You don’t have to deal with shipping or customs. You just place your order and the merchandise appears at your doorstep.

Buying wholesale also saves you time from having to perform extensive quality control checks on your merchandise because presumably the wholesaler has gone through it all already. Just keep in mind that if you plan on buying wholesale in the US that you may be asked for your DUNS number if you want to establish a line of credit.

A DUNS number is a number issued by Dun and Bradstreet, which is a company that helps you establish and monitor your business credit. You can sign up and get a DUNS number for free.

Buying Direct From Overseas Manufacturers

Buying direct from the manufacturer is the holy grail of merchandising, but it also takes the most amount of work, dedication and time. These days, almost everything is manufactured overseas because labor costs are much cheaper over there.

My general rule of thumb(for textiles at least) is if you are contacting a vendor in the United States, you aren’t going to get the best pricing for your products. I would even go as far as to say, if you are contacting someone that speaks perfect English, you aren’t going to get good prices either(Ok, that might be going a little too far).

Buying direct from the manufacturer or from overseas vendors is the best way to obtain the lowest prices, but it also presents the greatest upfront headaches. Here’s a list of things that we had to deal with when finding our vendors in Asia.

  • Our vendors spoke poor English so communication was often a big issue
  • Manufacturers in Asia have really crappy websites and it’s often hard to get an idea of their merchandise quality online
  • You have to purchase product in larger quantities, sometimes more than you are comfortable with
  • The logistics of shipping large amount of product overseas can be a major hassle
  • You will get sent crappy product at some point and you’ll have to constantly go back and forth with your vendor about quality issues until they are resolved.
  • Product returns are extremely complicated
  • There are long lead times in order to manufacture products so you have to plan ahead.
  • There may be long lead times just to obtain samples of the goods you want to sell.
  • Some of these vendors are just downright sketchy

Is Buying Direct From Overseas Worth It?

After reading about all of the hassles outlined above, is it really worth it? The answer is a resounding yes. The prices are unbeatable and the upfront investment is worth it in the long run.

Once you’ve established a good relationship with a vendor, it becomes smooth sailing from then on. You will be able to competitively price your products. You will be able to out price the larger chains and you will be able to differentiate yourself from the competition.

Once you have confidence in your manufacturers, you will then have the freedom to start designing your own products and that is where the big money starts to kick in. If you have the talent to design your own items, you have the potential to sell completely unique goods that no other store on the planet can offer.

How Do I Find Overseas Vendors?

A great place to start is online. There are a variety of search engines for overseas manufacturers. For example, alibaba.com is good place to start for a wide variety of items.

Once you’ve found some potential vendors, call them and email them. Get a feel for whether they truly carry the products that you’re interested in.

Once you’ve narrowed down potential vendors, you MUST hop on a plane and visit them directly. Especially if you are dealing with Asian vendors, face to face communication is absolutely required in order to establish a good relationship.

By visiting them directly, you are accomplishing three main things. One, you are showing them that you are serious about purchasing from them. Two, you will get to see their entire inventory of products in person to judge their quality. And three, you will be able to place a face with a name and get to know them on a personal level.

I remember on the way to visiting one of our first vendors that I was expecting to meet a sleazy asian dude wearing a wife beater and smoking a cigarette. Much to my surprise, our supplier was actually clean cut and a pleasant, honest looking fellow. After meeting him face to face, I had much more confidence in ordering from him. I wonder if he felt the same way after meeting me?

The Choice Is Yours

How you prefer to obtain your goods from your suppliers is up to you, but buying direct is a no brainer in my book. The more work that you are willing to put into your business, the more profits that you will make. No one said that opening an online store was going to be easy. By placing a larger investment of your time upfront, you will pave the way to greater rewards in the future.

Further Reading

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47 thoughts on “The Best Way To Find Vendors For Your Online Store”

  1. I drop ship with two of my vendors and it can be a PITA. I haven’t had any problems, but I do track the packages meticulously to make sure my customers do receive them!

    The good news is, I have a close relationships with both vendors (both smaller companies) so I communicate with them on a regular basis.

    1. Hi Carla,

      That’s interesting. Have you had to deal with returns yet? What about irate customers?

    2. Hi,

      My pleasure to know you are doing drop shipping business.
      we also have collect more than 800,000 products embracing 15 main categories on our site.

      We would like to cooperate with you in dropshipping and wholesale business.
      Let us talk more about the detail.

      Best Regards
      Andrews
      andrews.xsell@gmail.com

      1. Hello Andrews,

        I was wondering if we can work together. I have online store too.

        Thank You,
        Sandy

    3. Hey Carla, how is the dropshipping working for you?. Do you know any good trustworthy shippers?

  2. Hi Steve,

    I never had any returns or irate customers. In fact, I never had any communication with customers aside any minor emails. Knock on wood!

    1. Wow Carla,

      Consider yourself lucky then. Either that or your customers just love your product all the way through.

  3. What a fabulous and thorough article! I always wondered about the drop shipping thing, too. I guess I like controlling stuff too much to ever go for the drop ship option. ;-)

    I really enjoyed learning from you wisdom!

    *smiles*
    Michele

    1. Thanks Michele!

      Yeah, I’m too much of a control freak as well. In general, I at least want to be aware of everything that is going on even if I don’t have complete control.

  4. Well, I started drop shipping after I started selling products I purchased wholesale. I wanted to get used to all of this first before jumping into drop shipping right away.

    I wasn’t even going to drop ship but I needed to add more products to my site on a limited budget. I don’t like giving up the control either, but ‘them the breaks’ for the time being.

    1. Hey Carla,

      I didn’t mean to imply that drop shipping is a bad idea In fact I have a few friends that have been successful doing it. But you need a very high traffic and conversion ratio in order to make a living out of it. Power to you for getting it right for your store!

  5. Outstanding article. I can definitely vouch for the headaches of drop shipping, all it takes is one supplier screw up and you really have mess on your hands, thanks for the tips on wholesaling!

    Cheers!
    Brian

    1. Thanks for stopping by Brian!

      Finding the right supplier is definitely the key. Thanks for sharing your experiences.

  6. Thanks for the article, I have been looking for this quite some time now. I have visited AliBaba.com but never contact one of the vendors there which I might try out soon. How about some other importing issues like dealing with customs and so on?

    1. Hey Wayne,

      I’m not sure that dealing with customs warrants an entire article but I’ll try and cover it in a future post.

  7. I have been a retailer in the US for the last 30 years. I branched into mail order in the early 90s. What I found then was that in my industries the best sellers were big name brand items.

    I have imported some furniture from Indonesia and it didn’t go very well. The cost of storage after you get semi loads of product hurts too.

    A good customs broker can help a lot.

    It usually takes a lot of capital to purchase in container sized lots.

    Rick

    1. Hey Rick,

      Thanks for sharing your experiences on the blog. I guess success importing depends on the product. I couldn’t even imagine shipping furniture from overseas. I guess our inventory is on the smaller end so everything works out well.

  8. Hiya Steve,

    I’m back from Bermuda Triangle, hahaha! This post brings me back to the time when I was helping a friend with his online retail clothing business. All the issues you face and the benefits you reap in the United States are pretty much valid here in Asia as well. I had to chuckle when you said English speaking vendors come with a higher price tag … it’s true!

    1. Hi Irene,
      Wow, it has been a long time and I’m glad you are back! Hopefully for good this time. Yeah, it’s somewhat curious how there’s a direct relationship between cost and English speaking capability. If I call on a vendor and they speak perfect English, I tell them that I accidentally dialed the wrong number. Saves us both time!

  9. Thanks Steve! I guess time will tell if I can generate the traffic I need.

    1. Hey Carla,

      You know that I’m always rooting for you! You’ll have to share some of your experiences with me in the future. Are you up for a guest post maybe?

  10. Hi Steve – I would be honored! :D

  11. Hi Steve,

    Your articles are always filled with so much of your personal experience which make it much more interesting and authentic. This article had taught me something that I would need to know if I were to open an online store and thanks for the article. :)

    Cheers
    Vincent
    Personal Development Blogger

    1. Thanks Vincent,

      I really appreciate the comment!

  12. Hi Steve,

    You mentioned in a previous article that you had problems with your suppliers at first regarding quality.

    Did you visit them often, although its overseas, to check the order and quality as your orders got bigger or was it just based on trust?

    1. Hi Vanya

      We visited them in order to establish trust and rapport. As orders got bigger, we simply let them know which products were not up to par. Usually they would allow us to return the defective merchandise. Then in subsequent orders, they would fix the quality issues. It’s an iterative process.

  13. Naomi says:

    Hi Steve,
    I must say your articles have been pretty insightful. I have been so lazy about starting my own online store. Each time i get to a stage, I am just overwhelmed by some fear and I stopped.
    I have hosted a website but got stuck with where to find my products. I just abandoned the whole idea for about a year now.
    My worries are getting the right suppliers and quality.
    I hate my job so much and life was becoming a drag. I need help with starting up urgently.

  14. Did you have to obtain a work or travel Visa in order to interact with suppliers in Asia? What issues did you encounter or how did you prepare for the administrative side of getting in to view suppliers’ operations?

    1. @Micaela
      Unless you are visiting them in China, you don’t need a Visa. In terms of what issues we had when dealing with Asian vendors, I’ve written several posts about that already. Do a search for “vendors” and you’ll see a bunch of posts come up.

  15. lartiste says:

    i was with you until you said i had to go to china.. i have major fear of planes(like full blown panic anxiety and passing out) .. so much for that

  16. This is really very informative article. Do you know any other website than aliibaba for searching?

    Thanks

  17. @Ashley
    You can also try globalsources.net

  18. buythiscomputer says:

    I usually buy from the Personal shopper bangkok company in Thailand if it helps.

  19. Ihezie John Arinze says:

    Good morning Mr. Steve, Pls i am an Average worker living in Nigeria,and i would like to ask if you know any type of shipment or business to go into. Thanks.

  20. Catrina says:

    Hi Steve,
    Thanks for the info. I’m having a difficult time deciding on a niche market for my online store. I just became informed about Canton Fair. Do you believe that it is a good idea or a bad idea to attend the fair without a definite product niche in mind? Or is it ok to attend the fair in order to see some options and get some ideas from there?

    Catrina

    1. Hi Catrina,

      I would probably not attend the Canton Fair without having some sort of idea what you want to sell. The show is gigantic! And probably bigger than anything you’ve ever seen. Unless you have focus, I doubt that you’d be able to cover the entire show floor.

  21. Anna Wilson says:

    Have you ever heard of a trade show in the US that you could visit to see products?

  22. kevin says:

    This article is very useful, it helped a lot of viewers to get insight knowledge. Am currently living in china and been doing export business for quiet a long time. My advice would be not to trust easily some online companies when it comes to suppliers as you can find lot of small companies in Alibaba with fake accounts and ripping off newbies.

    1. Do not focus only on price as they provide some fancy price and once the deposit is been placed, the shipment wont be processed as stated.

    2. When searching for suppliers make sure they have direct contact with factories and provide you with adequate certificates and other international standards.

    3. Some small suppliers will tend to produce very low quality product for extremely low price, when it comes for shipment you will end up in misery as for few countries it is easier but most western countries have certain standards.

    If you need any assistance or help write to me at kevinjeremy@live.com, I can provide you help in finding some suitable supplier and can suggest you some good ideas about finding a good supplier. Please be aware before finding a supplier from Alibaba.

  23. pyna says:

    Hi. I want to find a supplier or vendors. Please help me find them :( i want to sell shoes and clothes or inspired items

  24. Hi everyone, If your interested in having oversea Vendors we as a EMC company can help you find the right vendors and the right products. We can get you almost anything you want give Us a shot!!

    Warm Regards
    Omar Abukar
    Omar.abukar@OTEGlobalLLC

  25. Efrain Serna says:

    Hello, I am 17 and really excited to learn about online selling. If any one needs help and is willing to take me under their wing. I would more than gladly be open to pay you as a tutor and help you out. If anyone is interested in helping me please contact me.
    efrain.serna16@gmail.com

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