Learn the Secrets to Succeeding in Global Trade
Wholesale 101 provides the tools and insight you need to launch a successful business by combining various platforms―B2B sites, trade shows, trading companies, andothers--into a powerful product sourcing strategy.
Whether you're looking to drop ship from wholesalers and manufacturers or import product direct to sell in your store, this unparalleled guide reveals inside informationof an industry full of secrets.
"If you are looking for a one-stop shop that turns the complicated world of sourcing product into a road map for success, then I encourage you to buy this book." -- TOM MCELROY, VP, Marketing and e-Commerce, Genco Marketplace and NoBetterDeal.com
"Provides lots of concrete advice on how to profit from this new age of wholesaling." -- DON DAVIS, Editor in Chief, Internet Retailer
"For any entrepreneur looking to start a business or expand their business, Wholesale 101 is a must read." -- MARC JOSEPH, CEO and President, DollarDays International, and author of The Secrets of Retailing: Or, How to Beat Wal-Mart
"One of the most informative and useful books on Wholesale Sourcing I have laid eyes on in the past ten years." -- SKIP MCGRATH, Publisher, Online Seller's Resource
"Very smart with a unique perspective on a variety of things important to our business, including global trade, international protocol, leveraging the Internet, and driving value for trade show participants." -- CHRISTOPHER MCCABE, Senior Vice President, Nielsen Expositions
"A must-have addition to any wholesalers library." -- CYRILL ELTSCHINGER, Strategic Advisor and author of Source Code China
"synopsis" may belong to another edition of this title.
JASON A. PRESCOTT, CEO of JP Communications, Inc., is the innovator behind the United States' top wholesale and manufacturer trade platforms: TopTenWholesale.com and Manufacturer.com.
Introduction | |
Acknowledgments | |
1 The Changing World of Product Sourcing | |
2 Stepping Out of the Silo | |
3 Sailing Your Boat in a Flooded Marketplace | |
4 Sourcing Online: TopTenWholesale.com and Manufacturer.com | |
5 Trade Shows: Where Do I Go? | |
6 Working with Trading Companies, Manufacturers' Reps, and Suppliers That Drop Ship | |
7 Better Supply-Chain Management through Building and Nurturing Strong Relationships with Suppliers | |
Appendix A: Resource for Global Trade | |
Appendix B: The Jargon behind International Trade | |
Index |
The Changing World of Product Sourcing
We are all working together, that's the secret.
—Sam Walton (1918–1992), founder of Walmart
To obtain success, retail and wholesale entrepreneurs need to know how to sourceproducts. Skip McGrath, online selling expert and coach, agrees, "As a retaileror wholesaler, you make money on products when you buy them, not when you sellthem." That's why product sourcing is so important. In fact, knowing how tosource successfully is one of the most closely guarded secrets among resellers.An eBay seller, for example, will share all kinds of information with newsellers just starting out; typically, they are that helpful. But just see whathappens when you ask a seller where he sources his products from; he clams up.
Budding entrepreneurs, small businesses, and savvy traders become experts atsourcing by knowing where to research, how to communicate, and when to adaptthroughout the process. This is why I have spoken to over 40 experts who sharepointers and coveted advice about product souring that will help you to developthose skills. Designed primarily to assist entrepreneurs, this book will provideyou with practical information for
1. Finding and vetting domestic and international manufacturers or wholesalers
2. Searching for a factory to help turn your idea into a resalable product
3. Importing existing goods from overseas
4. Sourcing strategically using online business-to-business (B2B) tradeplatforms, trade shows, trade magazines, trading companies, manufacturers' reps,and other resources
5. Building strong relationships with trading partners
No matter which of the preceding you are trying to achieve, you'll learn how toselect and maintain healthy relationships with trustworthy suppliers, which willenable you to achieve your business goals. You'll also learn about all thebenefits that different sourcing options offer and why developing qualityrelationships with suppliers is the most important thing you can do to obtainsuccess in your retail, wholesale, or trading business.
When people enter the world of product sourcing for the first time, they oftenbegin by focusing solely on the products. They want to find or produce theleast-expensive, best-selling products and don't think about anything else. Theyforget about the fact that they will need to get those products from people,namely, suppliers, whose business operations will affect the success of theirown businesses. Contrary to many a beginner's perceptions, Mike Bellamy, founderand China operations director of PassageMaker China, as well as the author ofThe Essential Reference Guide to China Sourcing, clarifies that "the single mostimportant factor in determining the success or failure of your sourcing programwill be finding the right supplier."
I agree with Mike and would like to add that the only way to find the bestsuppliers (and their stellar best-selling products) is by accessing the righttrade tools. To find those tools, you need to be up to date with the technologyand resources that have emerged, breaking the barriers to entering the B2Bcommerce-trading marketplace.
Evolution of the Sourcing Scene
While fundamentally product sourcing has never changed (it's still the act offinding products from wholesalers or manufacturers to resell through abusiness), technologically it's evolved into a whole new world. Not too long agoproduct sourcing was limited to word of mouth and archaic media for locatingwholesalers and manufacturers. People used to have to literally go knocking ondoors to find suppliers.
Jeremy Shepard, founder and CEO of Pearl Paradise, confirms this by sharing howhis sourcing process has developed over the years:
When I first started the company in the 90s, I had no idea about how to findsources. However, I was a flight attendant, so I could travel for free. I flewto locations all around the world where pearls were produced and pounded thepavement looking for suppliers. In Hong Kong (where pearls aren't produced, butthere is a major trading hub), I went through the local phonebook and foundcompanies that had the word pearl in their name and then went and knocked ontheir doors. Luckily, today things are much easier. We typically find newsuppliers at the large jewelry trade shows in Hong Kong, which we attend threetimes a year.
This is just one example of many that I will share with you about howprofessionals have changed their sourcing tactics in recent years.
Evolution of Trade Shows and Business-to-Business Print Media
Over the last 10 to 15 years, sourcing online has revolutionized the wayretailers and wholesalers source products. Going online to locate suppliersbecame much more common after September 11, 2001, when not only the worldeconomy changed, but travel, hospitality, and many other sectors also wentthrough rattling shifts. The national crisis that took place on that day made itless appealing for people to travel, which, coupled with the emergence of newdigital media, technologies, social media, and ubiquitous high-speed Internet,forced trade shows to face some competition as business travel took a hugedecline.
This led to a massive consolidation in the trade-show industry. The ASD tradeshow (formerly known as the Associated Surplus Dealers/Association ofMerchandise Dealers) used to have massive events in New York (at the JavitsCenter), Florida, Texas, and other areas. However, the company soon moved mostof its shows to Las Vegas. And ASD was not the only major trade show to makethese changes. Many trade shows that used to have smaller local shows now onlyhad a couple of major events in one easy-to-access location.
Manufacturers and wholesalers also started to put their products online, andreselling professionals began flocking to the Internet to conduct all theirindustry research. Given these changes, the trade-show industry was cut by morethan 40 percent in less than two years. The combination of the emergence ofsourcing online and dwindling trade-show attendance made people fear that tradeshows and business-to-business (B2B) print media eventually would disappear.
However, if you look at the sourcing industry today, this couldn't be furtherfrom the truth. The trade-show industry has not disappeared; things are justdifferent. ASD's shows in New York are no longer the must-attend events forsuppliers and buyers from all over the country. Today the company's events inLas Vegas are the most important, with an average of over 45,000 attendees andover 2,800 exhibitors. Also, trade shows are seeking expansion as the economybegins to resurge. ASD, for example, is currently planning to announce a newtrade show in Miami beginning in 2013. The company wants to accommodate theincrease in buyers and companies from the United States that want to export toSouth and Central America. This is an ideal location for language, culture, andease of access. And other major shows, such as SOURCING at MAGIC, the Off PriceSpecialist Show, and the National Hardware Show continue to expand theirinternational exhibits at a record pace. The Off Price Specialist Show, forexample, has seen its number of attendees grow by more than 25 percent over thelast three years. In fact, it recently received an award for being the fastest-growing trade show (www.toptenwholesale.com/news/offprice-show-wins-fastest-growing-show-award-17207.html).
Trade shows also have incorporated technological advances such as bloggerlounges and mobile technology that help buyers to get the most out of the shows.The trade-show industry keeps evolving, rather than becoming outdated, withrapid technological changes. Trade shows and B2B media have adapted with theease that technology has brought to the sourcing industry and have, in turn,brought more valuable resources to global trade. And new shows have emerged tohelp you stay up to date with technological development. Shows that focus one-commerce, such as the Internet Retailer Conference and Exhibition, have morethan tripled in size over the last five years. I will be discussing more aboutall these exciting trade shows in Chapter 5, but for now, stay with me as Idiscuss B2B magazines.
The Enduring Business-to-Business Magazine Industry
Business-to-business (B2B) magazines also have continued to endure the changesin the sourcing landscape. Despite being the most traditional method ofsourcing, trade magazines have many uses and are important tools in the retailand wholesale industry. One reason is their extra long shelf lives—theinformation in them stays relevant for a long time. Back when I first startedselling print advertising in 2001, I would get dozens of callers a week renewingtheir subscriptions or requesting copies of editions from five years prior,which continues to happen today.
Scott Steele, publisher and CEO of Canadian Merchandiser magazine, confirms thatB2B trade magazines are a popular method for product sourcing:
From the retailer's standpoint, print trade publications are reliable as theyare something that you can hold in your hands. They represent somewhat of anauthoritarian figurehead for buyers that you can utilize, not just for productsourcing, but also for the editorial information that comes along with them.Retailers still like the idea of having a physical hands-on publicationdedicated to their marketplace that gets delivered to them every month.
In addition, new magazines for the retail and wholesale industry have come intothe mix to meet the demands of the technological changes taking place. Todaythere are magazines dedicated to retailers who sell online in the e-commerceindustry.
Don Davis gave me a deeper understanding of how Internet Retailer magazinecaters to the e-commerce industry:
Internet Retailer magazine aims to provide retailers with information they canuse to more effectively sell online. It's aimed at a wide range of onlineretailers, from the smallest seller on eBay, to Amazon and Walmart. It'sdesigned to provide information for e-retailers of all types: those that sellonly on the web, retail chains, manufacturers, and retailers that sell throughcatalogs and call centers. In every article, we try to answer the question: Howcan our readers make more money by reading this article?
A small business or entrepreneur should subscribe to our magazines, visit ourwebsite, and use our research guides because they provide the most accurate andobjective information and analysis about e-commerce. In each issue of themagazine we cover a range of topics, and each article is very specific. Ifyou're interested in e-mail marketing or website performance, you'll findarticles about those topics every few months in Internet Retailer and on ourwebsite. Those articles mainly quote retailers—not vendors—and provide reportsfrom the front lines about how e-retailers are addressing these issues. Also,every article we've ever published, and that's thousands, is viewable on ourwebsite for free. Any retailer looking for information need only search our sitefor relevant articles. We also offer an e-mail newsletter, IRNewslink, whichbrings you breaking news on e-commerce five days a week.
Evolution of Business-to-Business Platforms
Business-to-business (B2B) trade platforms also have evolved considerably, evenduring their relatively short existence. What began as a simple Internet searchengine, limited to listing suppliers' names, has now become your own personalsourcing assistant. Business-to-business platforms such as TopTenWholesale.comand Manufacturer.com enable you to send out product requests, look for verifiedsuppliers, communicate with suppliers through instant chat tools, and use otherresources that make managing your retail or wholesale business (and findinggreat suppliers) easier. In addition, the technological advances on B2B sourcingplatforms make the supplier vetting process safer for buyers than ever before byverifying suppliers with the help of qualified third-party companies.
David Auren, an executive at Boulevard Apparel, explains how technologicaladvances have improved his sourcing process:
Before sourcing platforms such as TopTenWholesale.com came into the scene, I hadto do a lot of legwork and visit a lot of trade shows. I still go to shows,especially to build quality relationships with suppliers, but sourcing platformshave made life so much easier. They've opened up channels of directcommunication between buyers and sellers from the comfort of my own office. NowI don't have to travel as much, and I feel more comfortable when choosingsuppliers that have been vetted for me by these platforms.
Technology and Product Sourcing
Through the use of the technological tools that we have access to today (whichI'll describe in detail later on in this book), finding information aboutcompanies and communicating with them instantly are more achievable than everbefore. This makes managing relationships with suppliers, even those locatedoverseas, easier than ever before. The social media phenomenon has especiallymade it simple to vet and get to know suppliers. And this is just one of manytools available online today that help you to connect with suppliers. TheInternet has provided the stage for momentous leaps in technology that havesimplified the product sourcing process.
Megy Karydes, board member of the Fair Trade Federation and founder ofwww.World-Shoppe.com, agrees that product sourcing is more manageable than everbefore:
I started my business in 2004, and although it wasn't really that long ago,there weren't as many resources online for sourcing as there are today. Nowtechnology has made it a lot easier to find great products from all over theworld. We aren't restricted to going to trade shows or ordering from trademagazines.
The shrinking digital divide gives entrepreneurs worldwide the ability to starttheir own companies. Today millions of people run home-based businesses sellingproducts through personal websites and sites such as eBay and Amazon. Product-syndication solutions (provided by companies such as Channel Advisor andCommerce Interface) have made it easy for resellers to market their products tohundreds of the largest e-commerce retailers through software and services thatenable you to market and list products on multiple online venues.
With smart phones, tablets, and high-speed Internet connections, we are able tostay more connected than previous generations. Global trade is now as easy asentering a website address into your browser's search bar. Shipping logistictools such as shipwire.com, online sourcing platforms such asTopTenWholesale.com, online accounting tools such as Quicken Online, and e-commerce website builders such as volussion.com make it simple for entrepreneursto inexpensively set up a successful business and enter the market.
Starting your own business is now much more feasible than ever before. Todaythere are fewer restrictions on who can start their own business and achievesuccess. As Dominique Castro, cofounder of Twistlets (a fashion-accessorycompany for tween girls), explains, "It's a matter of starting with a vision andthen following through with the right tools and research."
Importance of Research for Sourcing
One of the most important things you can do as an entrepreneur is researchinnovative trends and tactics. For product sourcing purposes, the best tools touse (and the ones that will help you to meet the best suppliers) include onlineB2B trade platforms, trade shows, and B2B trade magazines. If you go into thebusiness without understanding these resources, then your chances of becomingthe next Sam Walton should be exchanged for a lottery ticket.
Don't be concerned if you already have a business and have not yet masteredthese tools. It's never too late to learn. Once you are finished reading thisbook, you will have a knowledge advantage over many of your peers. Lots ofpeople in this business are not savvy about the latest technology and resources.And they certainly don't have all the information and tips that I am about togive you. You, on the other hand, are in a good place because you are seekingout the right resources.
Scott Steele, publisher and CEO of Canadian Merchandiser magazine, confirms thatdoing research will put you in a great position to enter this business:
When you start your own company you will run into difficult situations and areasof business that you haven't dealt with before. Seeking out the rightinformation (from the right people) is a means of support that can help younavigate through the tough times, and achieve multifaceted rewards further downthe road. You will eventually have more control of your own destiny and life.Initially, your new venture is your entire life, and it needs to be viewed andworked that way.
Excerpted from WHOLESALE 101 by JASON A. PRESCOTT, TARA GLADSTONE. Copyright © 2013 McGraw-Hill Education. Excerpted by permission of McGraw-Hill Education.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.
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