What is a B2B Wholesale Distributor? Benefit, Challenge, 9 Facts

A wholesale distributor is a company that buys products from a manufacturer or producer and then sells those products to businesses in bulk. Wholesalers can be classified as either a reseller or a distributor.

This B2B Wholesale Distributor blog contains information on wholesalers, distributors, supply chain management, and logistics in the B2B industry. This blog provides information about best practices for companies in the industry and offers insights into the world of wholesale distribution.

What is a B2B Wholesale Distributor?

A business-to-business (B2B) wholesale distributor is a company that transfers goods along the supply chain by acquiring from manufacturers and selling to retailers, other manufacturers, or assemblers.

In general, a B2B wholesale distributor does not sell to end consumers. Frequently specializing in a particular industry or in closeouts, B2B wholesalers frequently offer benefits to businesses who create partnerships with them.

What is a B2B Wholesale Distributor?

5 ways that wholesale distributors can help ecommerce businesses

Due to the rapid growth of ecommerce, wholesalers are increasingly collaborating with small firms, such as ecommerce merchants. Here are several ways wholesale distributors and wholesale suppliers might help your online business.

1. Consistent access to products

Suppliers offer wholesale distributors price reductions for big purchases. You need not worry as much about running out of your best-selling items, as they ensure a consistent and reliable supply of product.

2. Access to products you otherwise wouldn’t have

Unless you own a larger company, making your own items takes a significant amount of time and money. Wholesalers are required when your company is unable to acquire directly from suppliers due to insufficient purchase amounts to meet the minimum order criteria of the providers.

3. Better prices

Even if a company meets the minimum order requirements of a supplier, wholesalers can frequently purchase products in bulk and obtain lower prices from the source. If you engage with a wholesaler, they will most likely have contacts in place that allow you to get superior low-price discounts on quality products in your industry.

4. Geographical access to products

You can get a greater selection of products from a wholesaler because you are not limited to the vendors nearest to you. If you wish to increase your product inventory and SKU count, wholesalers can assist you.

5. Quality control

By partnering with a reputable wholesaler, you can monitor product quality control by tracking the performance of their items with clients. You may decide to transfer wholesale distributors if they obtain an excessive amount of bad feedback or customer complaints.

3 resources to source a wholesale distributor for ecommerce

There are a few wholesale distributor resources worth investigating to help point you in the proper direction. Here are three markets and directories for distributors to assist you in locating the best one for your company.

Alibaba

Alibaba provides a wholesale marketplace where distributors for a variety of product specializations can be located. Here, you may simply evaluate possibilities within a specific product category or market segment.

SaleHoo

SaleHoo is a robust research instrument, supplier directory, and online community for dropshippers, wholesalers, and ecommerce stores. It is one of the most comprehensive online wholesale directories.

Wholesale Central

Wholesale Central is an online wholesale product directory. Items from both importers and domestic manufacturers are available in a range of categories.

What is a B2B Wholesale Distributor?

3 challenges ecommerce companies face in finding a wholesale distributor

Wholesale is a relatively new concept in the ecommerce business. Many wholesalers prefer to engage with established brick-and-mortar retailers, and they are sometimes hesitant to collaborate with online companies.

Here are some of the obstacles faced by e-commerce companies while sourcing a wholesale distributor.

1. Some wholesalers are better than others

Any ecommerce brand that has worked with a wholesale distributor would confirm that some are superior to others. Finding a reliable wholesale distributor is essential yet challenging.

There are no wholesaler review websites, therefore you will need to ask for references or ask your network to recommend a reliable distributor.

2. Many wholesale distributors don’t dropship

Many ecommerce businesses desire dropshipping because they don’t need to keep a large inventory on hand. Unfortunately, many wholesale distributors avoid dropshipping because it is incompatible with their business models.

3. Wholesale distributors are often reluctant to work with ecommerce companies

Despite the rise of ecommerce, wholesalers remain wary about collaborating with ecommerce enterprises. Among these are:

  • Distributors have field sales representatives who dislike it when online merchants perform their work for them.
  • Some suppliers are opposed to their items being sold via internet stores.
  • Distributors frequently request product data, which is then routed to the ecommerce site.

What is wholesale distribution: Examples

Typically, distributors specialize in a certain product, industry sector, or subsegment. Each subsegment faces unique obstacles, regulatory restrictions, and operational nuances, yet all are subject to the same market forces.

Cost management: Tackling wholesale distributor challenges

Cost management is the greatest obstacle for wholesale distributors. How can distributors streamline cost of goods sold (COGS) management?

The four major wholesale distribution industry subsegments are as follows:

  • Food and beverage
  • Healthcare
  • High-tech
  • Industrial

Here are examples of wholesale distribution companies across each major subsegment:

  1. Food and beverage distribution: Brakes Bros. is the premier B2B wholesale foodservice supplier in the United Kingdom and the catering and food supplier of choice for tens of thousands of cooks.
  2. Healthcare distribution: McKesson Corporation, which was founded in 1833, is the oldest and largest healthcare firm in the United States. It collaborates with biopharma firms, healthcare providers, pharmacies, manufacturers, foundations, and governments to ensure that medications, medical supplies, and healthcare services are delivered to patients when they are needed.
  3. High-tech distribution: Insight was established in 1988 as a global provider of technological solutions. They now provide IT solutions and services to state, municipal, and federal governments, as well as healthcare, higher education, and K-12 education, as well as other big worldwide organizations.
  4. Industrial distribution: Since its inception in 1962, PROMESA has been a significant distributor of tools, hardware, and automotive supplies in Ecuador.

What is a B2B Wholesale Distributor?

Wholesale distribution trends: How to win critical buying moments

2020 wholesale distribution trends concentrate on B2B buyers and winning important moments in which front-office connectivity creates exceptional client experiences.

Clearly, wholesale distribution is a thriving and diverse industry. In subsequent posts, we’ll analyze wholesale distribution’s function in the global supply chain and the difficulties faced by distributors.

Finding the Right Partner

Despite the importance of nurturing and sustaining all business relationships, not all manufacturer-distributor relationships serve the same function. Depending on the requirements of your organization, your relationship with one manufacturer or distributor may differ significantly from that with another.

Before selecting a manufacturer or distributor as your business partner, you must determine which of the following two relationships you seek.

1. Tactical relationship

We understand that committing to a collaboration with a manufacturer or distributor can be nerve-wracking. It is a crucial decision that will have significant effects on your business and its performance, for better or worse.

If this describes you, a tactical relationship might be a good option. A tactical relationship is all about dipping your toes in the water to discover if the partnership is worth long-term investment.

However, if the partnership fails or you are simply not ready to commit, you are not required to continue working with the same manufacturer or distributor after the initial transaction. It could simply be a means to an end for both of you.

2. Strategic relationship

A strategic partnership, on the other hand, is the way to go if you’ve discovered a manufacturer or distributor you really trust and are ready to take it to the next level.

The producer and distributor collaborate as a team in a strategic relationship, communicate often to apply customer feedback and enhance product lines. Typically, this is a long-term partnership in which you and the distributor collaborate to expand into new markets and reach new consumers.

While you may each have your own company goals, working as a team allows you to support one another more efficiently than if you worked individually. A strategic connection encourages collaboration, opens the door to new opportunities, and ultimately results in a better customer experience.

Tips for Finding a Wholesale Distributor

1. Understand Your Industry’s Distribution Channels

There are numerous routes a product can take from the manufacturer to the store. Different wholesalers service distinct markets. Understanding the distribution channels and supply chain of your industry will assist you in locating the ideal wholesale supplier for your retail or online business. Among the several sorts of wholesalers are:

What is a B2B Wholesale Distributor?

    • Manufacturer: You can purchase certain things straight from the manufacturer. Typically, boutiques purchase from small (often one-person) manufacturers.
    • Importer/Exclusive Distributor: A company might have the sole right to import and distribute a product in a certain country. Some may sell directly to retailers, others sell to smaller local wholesalers who in turn sell to stores.
    • Wholesaler/Regional Distributor: Regional wholesalers typically accept boxcar-sized deliveries and sell to local wholesalers, who then sell to small firms.
  • Jobbers: These individuals make daily deliveries to local grocers and retail brick-and-mortar stores.

Some merchants will have sufficient volume to bypass jobbers, and in some industries, importers will sell directly to retailers. Each sector has its own distribution routes, which might vary depending on the product, area, or country.

Initially, you would purchase from smaller wholesalers at a premium price. As your business increases, you will be able to negotiate better pricing or transition to a larger wholesaler.

2. Try the Manufacturer First

Paying wholesalers decreases earnings. To eliminate intermediaries, you might begin at the source.

If you are selling branded merchandise, you should contact the manufacturer directly. Based on their minimum order criteria, they might sell to you. If you are too small or they only distribute through established distribution channels, request a list of reliable distributors you can approach.

The fewer intermediaries you must negotiate with, the lower your costs will be, making you more competitive in the market.

Request a sample of the product you intend to sell from the manufacturer when you make contact. This will allow you to examine the item and evaluate its quality to ensure that it is something you wish to sell.

3. Have a Productive First Contact With a Wholesale Supplier

Contact wholesale wholesalers using the list you received from the manufacturer, the phone book, or a wholesale directory. You wish to discover:

  • Their minimum order quantities
  • Their unit wholesale pricing
  • The area they serve

You can initiate contact by phone or email, then follow up by phone if you require additional information or choose to proceed. Be truthful about what you’re looking for and don’t try to sound more important than you are in order to locate the ideal match for your organization.

Do not be hesitant to inform the people you speak with that you are conducting research and evaluating different competitors. This can help you negotiate better costs, even if your business is just beginning.

4. Get Specific in Online Searches

Do not restrict your online search to generic wholesalers or distributors. Include keywords relevant to your products or market. Try using the product’s name, model number, and brand name. If any of the possible distributors you discover lack an email address or phone number, you could use a WHOIS search to obtain the website owner’s contact information.

The greater the number of possible wholesalers you locate, the more effectively you will be able to compare pricing, determine industry norms, and obtain competitive bids.

5. Look for Wholesale Lots on eBay

Due to eBay’s primary focus on retail consumers, the wholesale solutions available here are typically only viable for relatively low-volume sellers. But if you’re just starting out in e-commerce, eBay may be the easiest way to get started.

It is also likely that individuals who sell directly to consumers on eBay have a business-to-business component. It is simple to contact them on eBay to determine if this is the case.

6. Check Major B2B Marketplaces

There are numerous online B2B marketplaces where you may purchase huge quantities of things at reasonable prices. Alibaba.com is one of the leading B2B marketplaces for manufacturers, wholesale distributors, and importers. Additional B2B markets include:

  • Global Origins (USA)
    Busy Trade (USA)
  • Buyer Zone (USA)
  • EC21 (Korea)
  • EC Plaza (Korea)
  • Busy Trade (Hong Kong)

Find a marketplace that serves your nation or region. There are also industry-specific B2B marketplaces, which can serve shops in a single country or throughout the globe.

Find a marketplace that serves your nation or region. There are also industry-specific B2B marketplaces, which can serve shops in a single country or throughout the globe.

7. Join Industry Groups, Forums, and Other Professional Networks

Typically, the best source of information regarding wholesalers is more seasoned small business entrepreneurs in your sector or area.

What is a B2B Wholesale Distributor?

However, other merchants will likely be reluctant to share supplier information with rivals. Investing time in networking will help you identify the best possible wholesale suppliers for your small business by establishing credibility and fostering relationships.

Participate in internet forums, which may be a terrific source of free information and assistance from other market or industry experts. To increase your professional connections, you can also create a LinkedIn profile, subscribe to industry newsletters, and join your local Chamber of Commerce or small company networking organizations.

8. Subscribe to Your Industry’s Trade Publications

There is a plethora of information about businesses and relationships within your industry that can be found in trade publications. A single issue of a trade journal can give the contact information for dozens of wholesalers and small businesses.

Subscribe to online newsletters and blogs in addition to publications. This is typically the easiest way to stay abreast of daily or weekly industry news and updates.

9. Attend a Trade Show

Trade fairs are one of the most effective strategies to establish and grow your company. These events are intended to connect retailers with distributors and manufacturers.

In a single day, you can meet and interact with dozens of wholesalers or manufacturers at a trade fair. Face-to-face talks frequently avoid misinterpretation or communication problems that can arise when contacting individuals online.

The Trade Show News Network is the most comprehensive trade show directory available online. You may find a trade show by industry, date, city, state, or nation, as well as event name.

10. Don’t Be Afraid to Make a Mistake

Your first wholesale supplier might not be a long-term partner. Creating your ideal supply chain is a trial-and-error process.

Remember that the only thing you require from your first supplier is a product that can be shipped at a profit. You can make adjustments as your business and professional network grows.

Shipping a product is your primary objective. As you continue to create and expand your business, you can increase your bottom line by experimenting with new wholesale providers.

The Future of B2B Wholesale Distribution

Changes Confronted by the Wholesale Distribution Industry

Changes in the social, political, and environmental spheres have a significant impact on the manner in which businesses transact with one another. Businesses must adjust the customer experience to the current market conditions and customer expectations in order to advance with the times.

In the past year, numerous wholesale distributors have been forced to modify their purchasing and selling procedures. Covid-19 has prompted firms to establish geographically distant consumer contacts, hence increasing the demand for always-on and individualized services. Now, wholesalers must compete on an entirely new playing field.

Breaking New Ground for Wholesale Distributors

To meet the requirements of the new normal and beyond, wholesale distributors can maintain their competitiveness by converting their business models into a vertical one-stop-shop for all transactions, offerings, and interactions.

A B2B marketplace provides wholesale distributors with the optimal solution for aligning their company strategy with changing client expectations.

With a vertical marketplace, wholesalers may display and increase their inventory to become the go-to B2B organization. In a variety of ways, marketplaces assist wholesale distributors in providing opportunities for buyers and sellers.

Buyers can rely on digital channels to purchase everything from a single source, together with services based on in-depth product knowledge, if a home for product offerings is established. Meanwhile, sellers have the benefit of reaching an international audience.

The purpose of a marketplace is to buy and sell all goods on a single platform. Ultimately, wholesalers can expand the current marketplace by bringing on additional vendors to offer to clients.

The addition of additional vendors will increase selection and lead to increased revenues in which distributors will share proportionally.

This affords wholesale distributors the opportunity to extend their product offerings beyond customer requirements.

By forming partnerships with vendors, wholesalers can cultivate positive client relationships, offer a variety of new services and goods, and even expand their market to include consultation and installation. The possibilities for providing previously unavailable services grow limitless.

Shifting from Traditional Business Models to B2B Marketplaces

Traditionally, wholesale distributors acquire ownership of the commodities they purchase from suppliers. A marketplace enables wholesalers to develop the network without risking reduced margins via a bound capital strategy.

Although this can create a new risk for wholesalers, the opportunity can exceed the risk if excellent connections are established with vendors who provide quality products and solutions that fulfill the brand’s promise.

As a response to changing client preferences, wholesale distributors should strive to become the go-to firm in B2B in order to compete with larger businesses.

The strategy for success should not be to directly compete with larger corporations, but rather to personalize the market and target a certain sector. Wholesalers should concentrate on the aspects that will set them apart and make them the top choice.

By employing experience and in-depth product knowledge, wholesalers can selectively expand their assortment with high-quality, complementary offers to provide clients with more services, goods, and solutions. Ultimately adopting a different business approach.

What is a B2B Wholesale Distributor?

It makes sense that B2B marketplaces represent the future of wholesale distribution, given all of these factors. If your company has not yet considered the transition, there is no better time than now. What are you anticipating? Take the necessary measures to lead wholesale distribution into the future.

In a cooperation, SAP and Mirakl have developed a platform to assist wholesale distributors in launching marketplaces and adapting their operations to a changing demand through digitalization.

Manufacturer vs. Distributor vs. Wholesaler: What’s the Difference?

Before analyzing the distinctions between producers, distributors, and wholesalers, let’s first ensure that we grasp the supply chain’s order.

The following is a summary: The supplier (usually a manufacturer, packager, or processor) provides the distributor with the goods, and the distributor has a direct contact with the provider. The wholesaler then purchases bulk amounts of goods from the distributor and sells them to retailers. And lastly, the store sells the merchandise to the customer.

It is easy to get confused about who performs what and when in a simple operation. Therefore, we will describe in the simplest words the function of each stakeholder and what to anticipate at each process step.

1. Working with a supplier

To initiate the production process, the supplier provides the necessary raw materials. The supplier may purchase these products from a manufacturer, or they may function as the maker themselves. The supplier, as the origin of all goods and services, sells products to distributors and wholesalers.

Even if they have the means to make products, suppliers rarely sell directly to retailers or consumers; therefore, they require a distributor or wholesaler to function as an intermediary.

Therefore, if you are a wholesaler or B2B firm, it is possible that you will deal with a supplier, but it is less probable that you will sell to consumers directly.

When selecting a supplier, you will need to establish criteria to determine which providers fit your expectations and will operate well with your organization. Here are some important considerations:

  • Price: While price should not always be the decisive factor, it is necessary to compare a supplier’s price level to that of its competitors.
  • Quality assurance: Because you want your suppliers to be dependable and regularly supply high-quality items, investigate the actions they take to ensure product quality.
  • Communication standards: Communication is essential in any business connection. As a result, make certain that the supplier you select is responsive and maintains open communication lines.
  • Location: Keep in mind that the closer a supplier is to you, the more probable it is that you will receive your products on time.

Examples of suppliers

Manufacturers, packagers, and processors are examples of suppliers, and they supply raw materials to distributors and wholesalers. For example, a shoe manufacturing company would require the materials that comprise the shoe. As a result, they may need to acquire from a manufacturer of leather, thread, or rubber.

What is a B2B Wholesale Distributor?

2. Role of a distributor

Suppliers may be manufacturers, packagers, or processors; they provide distributors and wholesalers with raw materials. For instance, a manufacturing company that produces shoes would require the shoe’s components. Therefore, they may need to source their materials from a manufacturer of leather, thread, or rubber.

You have two possibilities for your next move if you’re a manufacturer. You can sell directly to the end user, the customer, or you can work with a distributor to market your goods.

If you desire to have greater control over the selling part of your business, you may omit the middleman. Managing orders, packaging, and marketing can be challenging to balance with other business tasks.

A distributor, on the other hand, can function as a liaison between you and the customer, utilizing marketing strategies and inventory management to move your goods via the distribution channel. Their responsibility is to locate wholesalers or merchants and deliver the manufacturer’s products to them.

Due to the distributor’s familiarity with your products and business model, he or she will hopefully be able to extend your customer base and distribute your items to regions that you may not be able to reach on your own.

Occasionally, these distributors serve as liaisons for a single geographic region and can only sell within that region, or they can aid multinational corporations with international distribution.

Choosing the appropriate distributor is essential to effective supply chain management. Here are a few essential procedures to ensure that you acquire the ideal job:

  1. Make sure your product is ready for market.
  2. Understand your distributor and where they can sell.
  3. Research your target audience and make sure your distributor is able to sell to them.
  4. Read reviews and search for references.

3. Function of a wholesaler

After the product has passed through the hands of the manufacturer and distributor, the wholesaler purchases huge quantities of the goods to sell to retailers. As a result of purchasing in quantity, the wholesaler is frequently able to purchase from the distributor at a discount and resell at a discount.

Rather than selling directly to consumers, wholesalers typically sell to retailers at wholesale prices. The retailer will then generate a profit by selling the item at retail.

Not every shop, however, purchases goods through a wholesaler. If you purchase straight from a distributor, you will likely have no dealings with wholesalers. However, it can be advantageous to purchase directly from a wholesaler in order to avoid dealing with several producers.

Here are some questions to ask when searching for the ideal wholesaler:

Does the wholesaler carry products suited to your unique requirements, industry, and target market?
Does the distributor just sell to businesses? Or do they sell to consumers directly?
Do they have positive evaluations from competing retailers?
How dependable are they? Are the correct products delivered on time?

Conclusion

A B2B wholesale distributor is a business that helps businesses sell to other businesses in different industries. Wholesale distributors often help companies reach other businesses through marketing and networking.

Wholesale distributors are also commonly known as “middlemen,” and they buy products from manufacturers at a lower cost than consumers. Then, they resell these products to businesses in order to make a profit. This process allows wholesalers to make big savings and provide businesses with better prices.

FAQ

A business-to-business (B2B) wholesale distributor refers to a business that moves products through the supply chain by purchasing from manufacturers and selling to retailers, other manufacturers, or assemblers. Typically, a B2B wholesale distributor does not sell to the end consumer.
Wholesale ecommerce is a type of B2B business, although the terms are often used interchangeably. They receive products from the manufacturer and then sell them to other businesses. The primary differentiator that defines wholesales is the quantities they purchase and their specific business model.
What is a wholesale distributor? A wholesale distributor (aka wholesaler) buys large quantities of goods directly from manufacturers and resells them to retailers and ecommerce businesses
B2B stands for “business to business.” B2C stands for “business to consumer.” Retailers participate in B2C transactions. They receive a product from another business, a wholesaler, and sell it to consumers. Wholesalers engage in B2B sales.

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