According to Frost & Sullivan survey, size of the global B2B multi-vendor marketplace ecommerce market is expected to reach nearly US $7 trillion by 2020 – more than double that of B2C:
In the US B2B ecommerce sales is projected to increase to more than US$1 trillion, while Chinese major B2B online marketplace platform Alibaba is expected to reach US $2.1 trillion by 2020.
Wholesale suppliers are one of the most common sellers for B2B multi vendor wholesale marketplaces.
They purchase from warehouses and manufacturers in big quantities to sell further.
Their prices are higher than the manufacturer’s, but collaborating with them have the following benefits:
- They provide products from several manufacturers;
- Enable smaller orders comparing to manufacturers;
- Faster delivery and a lower freight cost;
- Large discount on bulk orders.
The wholesalers place in a supply chain:
Thus, online B2B wholesale marketplaces connect suppliers to professional clients and other types of consumers.
According to EuroCommerce, there are 1.8 million wholesale suppliers just in the EU, thus, being able to evaluate and select the right wholesale suppliers is just as important as knowing where to find them.
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1. Define Your Ideal Wholesale Supplier Profile
Understand which customers are the main audience for suppliers on your online wholesale marketplace platform and outline the kind of supplier your marketplace’s clients need:
- Industry or niche specific suppliers;
- Suppliers which offer a variety of different products;
- Drop shippers: offer a large selection of product without purchasing inventory upfront and managing that inventory;
- Geo: global / countrywide / local suppliers.
The B2B wholesale online marketplace platform Doba builds its service with focus on dropshippers as customers:
Define your wholesale online marketplace clients’ priorities and goals.
If the customers’ priority is price, focus on suppliers from China.
The labor costs are cheaper there, so if you sell labor intensive goods (i.e. textiles, clothing), it’s a good area to find suitable suppliers.
Identify an in-trend product:
- Through apps like Keepa and CamelCamelCamel to get a sales history report on the products you’re interested in selling;
- Through the How Many extension to find out how much your competitors have of various items;
- Some wholesale directories provide market intelligence, like SalesHoo with its Market Research Labs:
On the basis of an Ideal Wholesale Supplier’s Profile, create few segments of target suppliers to prioritize your searching efforts:
Define your search geography: domestic wholesale vendors enable faster shipping time, overseas suppliers can be cheaper and provide goods you won’t find in your country.
Alibaba is acquiring wholesale suppliers from all corners of the world:
2. Places to Find Wholesale Suppliers
2.1 Wholesale Directories
To get a constantly-updating list of the top-notch wholesale suppliers, it’s best to pay attention to the directories which invest serious efforts in developing their suppliers, like National Association of Wholesaler-Distributors.
National Association of Wholesaler-Distributors educational program:
Use niche directories, especially those which are grouped by merchandise type.
Worldwide Brands directory provides the ability to find wholesale suppliers by a product or a city and has the import suppliers that have been through a thorough certification procedure, while Global Sources is focusing on electronics.
In addition, there are the directories for different geos:
You can also check mixed directories where you can find vendors among manufacturers and traders.
Keep in mind that many libraries pay monthly subscription fees for wholesale directories that you normally wouldn’t have access to, or you’d have to pay for.
2.2 Other Online Wholesale Marketplaces
On online marketplaces sellers have often been vetted already and are easy to find.
The multi vendor online marketplace platform Alibaba offers a different statuses of verification:
- A&V Check — all legal business licenses and contact persons are verified;
- Onsite Check — the seller’s premises are checked by Alibaba’s staff, the legal status and other related information are confirmed by a third-party verification agency;
- Assessed Supplier — independent and impartial third-party verification by the dedicated agencies.
The B2B wholesale marketplace has a mixed selection: traders, individuals, manufacturers and wholesale vendors.
If you need niche vendors, there are specific wholesale marketplaces to focus on, like LAShowRoom, a fashion online wholesale marketplace platform:
However, wholesale sellers which are already represented through online marketplaces may have higher demands and prefer to work with a higher minimum order quantities.
2.3 Offline Search
Use offline brochures, flyers, representatives, offline wholesale hubs and platforms.
Check local wholesale markets of the niche you are focusing on:
Trade Shows and meetups not only help to find vendors through pinpointing those events by industry and location, but provide the following advantages:
- price comparison;
- tracking upcoming trends and your competitors’ interests.
2.4 Wholesale communities
Wholesale forums will help you not only find sellers, but gain additional insights and insider information on the market and potential sellers.
Professional networks and Industry Associations provide Member Association Lists with links to the websites of many different industry wholesale vendor associations.
Leverage Social Media:
- Wholesale groups and communities;
- LinkedIn prospecting.
Use trade magazines and industry publications to collect information about suitable wholesale merchants through vendors advertising and an industry directory.
2.5 Referrals and Recommendations
Additionally, use the manufacturer’s recommendations on who the distributor for the product in your region is and manufacturers websites where the wholesale partners are listed.
Plus on the basis of their industry expertise and rich contacts, vendors which don’t fit your requirements can recommend you a perfect match merchants for your online wholesale marketplace platform.
3. Evaluation and Selection
3.1 Credibility checking
Besides checking samples and negotiate pricing, use dedicated organizations like the Better Business Bureau (BBB) to make sure there haven’t been any complaints filed against your prospective merchants.
Check social media pages reviews, and implement Social Listening — the monitoring of the merchant social media channels for any customer feedback and direct mentions.
Also, clarify the following:
- how they create value to stay relevant for customers and manufacturers;
- how they collect the customer intelligence to create better offers;
- their strong side — the place in the chain where they can be more helpful than other players: storage, transport;
- their product expertise.
3.2 Evaluation parameters
Besides choosing suitable wholesale merchants, a thorough evaluation helps to avoid scammers — the companies which claims to be a manufacturers or a merchant, when in fact they are much further down the supply chain.
Create the evaluation parameters and procedure to apply the same approach to all potential sellers:
1. Basic parameters:
- samples quality;
- quality control approach;
- producers they work with;
- if they are connected already through other channels to your existing and target customers;
- a knowledge of your industry’s shipping needs: when choosing a food vendor, make sure they’re using quality refrigerated trucks to keep your products fresh.
2. Points that are important for your online wholesale marketplace platform customers:
- quantity based discounts and minimum orders;
- painless ordering process, order processing time;
- payment terms, security and recourse;
- if they ship internationally (if it suits your online wholesale marketplace customers) and shipping charges;
- returns terms & conditions;
- products warranty;
- sales support.
3. Conditions that are important for you and an online wholesale marketplace:
- SKU management quality;
- brand familiarity;
- if they sell established products – to lessen the risk associated with purchasing inventory;
- intellectual property right protection;
- sample pricing: the full retail pricing, a discounted rate, or free.
3.3 Advanced Evaluation Parameters
According to an Institute of Retail Management study, in some fields, the wholesale merchant’s role has varied from simple intermediaries to real exchange facilitators between the producer and the customer by identifying their needs and offering advanced and transforming solutions.
If you plan to sell a complex product or enter a saturated market, these are the following points to evaluate when selecting vendors:
1. Vendors provide integrated business-to-business services to their customers:
- expert staff and industry focus — especially in technical sectors, specialisation is fundamental and often requires specialised training programmes;
- additional support to professional clients;
- technical assistance;
- technological advancement, like real-time inventory;
- tailor-made, product-specific training and support to customers.
Li & Fung, a large Chinese wholesale merchant, adapted from a commercial agent role for the textile industry to a focus on supply chain improvement:
The merchant is not just selling goods, it adds value to customers enabling the following:
- integration of all the logistics processes;
- the dispatching of production activities and operations in factories;
- settlement of customs duties;
- local delivery solutions.
A Chinese wholesale online marketplace platform, Chinabrands, provides the following services:
- SEO-optimized product descriptions to customers;
- professional teams that implement market search to help customers identify trendy products;
- highly trained quality control teams which ensure the quality of the vendor’s partner manufacturers’ products.
Additionally, evaluate if potential vendors meet your specific requirements.
If your online marketplace’s customers need the vendors who provide the imported goods, those importers need to know the following:
- the producers and production conditions in a variety of countries;
- import rules;
- the main supply chain players.
While European goods are in strong demand worldwide, many of the manufacturers are not directly represented in overseas markets, and use European export trading companies to sell their products abroad.
4. Negotiations with Prospective Wholesalers
4.1 Initial Negotiations
The wholesale business is volume-centric. The more you can buy, the lower the prices.
A new multi vendor online marketplace cannot guarantee buying in bulk so it’s hard to attract a high-volume wholesaler.
Build credibility through a clear communication of your business plan, suitable background and future outcomes.
Identify the decision-making group within a wholesaler’s organization, understand their issues and clarify the benefits of working with your online marketplace platform.
Doba is outlining its benefits for wholesale vendors:
When negotiating pricing and the minimum order price, ask for a few prices for multiple quantities and understand why the merchant has imposed a minimum:
- a lot of work upfront;
- they prefer to work with larger buyers.
4.2 Motivating Wholesale Suppliers to Working with You
Understand how you can improve the perspective vendors existing supply chain.
Track your target vendors current distribution channels and outline how your online multi vendor platform could enhance them.
The online wholesale marketplace platform Alibaba connects Western businesses with Asian wholesale sellers.
Before the online marketplace stepped in, the distribution chain was too long and involved:
- Chinese factories;
- Chinese distributors;
- Chinese wholesalers;
- Western distributors and wholesalers;
- Western businesses.
The online marketplace platform made finding and contacting Chinese manufacturers much simpler and more effective.
Procsea, a wholesale fish marketplace, offers an improved and more streamlined supply chain:
In addition, it facilitates the interaction between wholesalers and the other transaction participants:
Provide an ecosystem that meets the wholesalers needs and gives them effective tools for branding and business efficiency, like Ralali, an Indonesian B2B online marketplace.
Ralali’s ecosystem for its wholesalers and customers:
Clarify that your multi vendor ecommerce marketplace will enrich the wholesaler’s own e-commerce channels:
- access to buyers who may not otherwise find them;
- new online customers in case if your target wholesalers don’t have any online sales channels yet;
- niche audience which they otherwise wouldn’t be able to reach.
B2B online marketplaces are growing strongly as more manufacturers, wholesalers, and distributors see its value in helping them find new buyers and opportunities to grow:
Logan Tan Jun An
CEO, Co-founder Eezee
Logan spent his past 5 years gaining experience in Business Development roles across the finance and construction sector which eventually led him to founding Eezee. At Eezee, they aim to streamline the lengthy and tedious procurement process with the use of technology. Eezee.sg (a B2B marketplace in Southeast Asia) within 1.5 years has grown to over 400 merchants and 40,000 in product SKU.
1. How to find the best suppliers for your marketplace?
Best if you have industry experience. I came from the construction background and saw an instant gap. Many eCommerce marketplaces are competing in the B2C & C2C space and there was a gap in the B2B space where procurement is not transparent at all. Thus, with our marketplaces, we instantly fill we gap where B2B merchants are looking for a place to market their goods and products and transform the procurement process. From my background and working experience in the construction sector, I have known the merchants for a period of time and did a survey before I started my Eezee.sg, from my base of trusted vendors, I managed to kickstart the company with a small seller base and product base.
2. How to define your ideal wholesale merchant profile?
Depending on what is your eCommerce built for. You must be sure because a B2C, C2C, B2B eCommerce marketplace have very different reach and different reach will have different vendor profile…. You must first define your customers and focus on a particular vertical.
3. Where to find your ideal wholesale vendor?
As mentioned, from my work experience and background. I already had relationships with them so starting up wasn’t an issue. From there, we served them well and focus on their needs and see how the marketplace and help them as well. Our marketplace platform means that they do not need to create their own eCommerce since it is not in their field of expertise to create an eCommerce that work, even if they outsource, the IT vendor do not know how to build a proper eCommerce will just end up delivering a product that they don’t need or nobody wants. eCommerce is an art and requires constant iteration and all those iterations are data-driven…. Basically, IT vendors and suppliers will not know-how. By working with us, they do not need to think much about their eCommerce strategy as we provide the platform and constantly improve to fit buyers’ needs as well. Best of all, they don’t even have to worry about the cost as it’s free to list and create products.
4. How to motivate wholesale vendors to work with you?
Ultimately sellers will only want to have 1 thing, which is sales. As long as you provide them enough sales, they will eventually support you more. In terms of pricing or effort required. There will be sellers that do not want to work with you simply because they are afraid of disrupting their retailers and making their product prices too transparent. You just have to keep hustling and find vendors that are willing to work together. From there, vendors will do an introduction to their circle of friends as they are a close-knitted bunch and will have their own network of friends in the same field. If one wholesale supplier does not want to work together, find their rival or competitor to join your platform and do well for them so eventually, you will be noticed and they will have no choice but to join. Digitalization is going to be the future of every industry sector.
Thus, the paradigm of working with wholesalers is shifting from finding and evaluating to retaining wholesale merchants and enabling their success.
The wholesaler’s success depends on good collaboration and the coordination of activities between wholesaler and customer.
It is a joint value creation based on the wholesaler’s specific role in the supply chain in which they operate—each of their services adds value to the process.
Therefore, the main competitive advantage of a wholesale marketplace is to give up the intermediary platform role and become an equal participant of that supply chain by improving it and giving to wholesalers the marketplace platform technology and advanced services advantage to win customers together.
Wholesale Directories in Different Regions
Thaitrade.com is an official Thailand B2B E-Marketplace established in 2011 by Department of International Trade Promotion (DITP), Ministry of Commerce (MOC) Thailand. The main purpose of Thaitrade.com is to enhance trade opportunity of Thai exporters under the idea of pooling most of Thai export products in one e-marketplace and to be the most effective way for our trade partners from over the world to find the required products from Thailand.
tradeKorea.com is a global B2B marketplace where global buyers and suppliers meet to start trade. tradeKorea aims to be the most reliable online platform for both Korean trading companies and overseas buyers. KITA (Korea International Trade Association) which operates tradeKorea, is a non-profit private organization established in 1946, currently with over 70,000 members. As a leader in advancing export strategies, trade systems and procedures, KITA supports SMEs to find new markets and secure a wide range of business connections through tradeKorea’s database.
On ChinaBrands.com, you can find wholesale products to sell in your online store by drop shipping, which means you don’t need to keep inventory at your site.
WholesaleFashionSquare (United States)
WholesaleFashionSquare.com provided boutiques and online shops with women’s clothes, accessories, makeup, and trendy, high-quality fashion items. They offer products in bulk only, which helps them keep prices low.
SourceLow (United Kingdom)
SourceLow.com is the largest (free to use) global trade directory of manufacturers, wholesalers and drop shipping suppliers, as well as an online learning platform, research tool and comparison website for eCommerce newbies. They connect business-to-business (B2B) buyers with reputable, low-cost suppliers and help them to build a successful online eCommerce business.