Pros and Cons of Dropshipping: Here’s What You Need to Know

Posted on January 13, 2018 by dearsyst

Do you want to start an ecommerce business with low overhead and no warehouse and still make a profit?

Then dropshipping is the business model you’re looking for.

But starting a dropshipping business isn’t the right choice for every entrepreneur. There are significant tradeoffs between dropshipping and traditional wholesaling.

We’ll look at the pros and cons of dropshipping and help you make the right choice for your business today.

What Is Dropshipping and How Does It Work?

Dropshipping is a business model that allows you to sell and ship products you don’t own and don’t stock.

Your suppliers – wholesalers or manufacturers – produce the goods, warehouse them, and ship them to your customers for you.

The process is simple:

– You receive an order

– You forward the order to your supplier

– Your supplier fulfills the order

While dropshipping has many benefits, it also has many drawbacks. We’ll explore both in the sections below.

What Are the Pros and Cons of Dropshipping

Many people start a dropshipping business because they think it’ll be easy to run.

“No inventory, no problem!” they say.

The truth is, it’s not “easy.” It comes with its own set of problems.

With that said, dropshipping also solves many problems for retailers and wholesalers.

Let’s take a look at the pros and cons of dropshipping to see if it will solve your business problems or if it will add to them.

Pros of Dropshipping

1. Low Startup Costs

It requires a lot of capital to stock a warehouse. You can eliminate the risk of going into debt to start your business by using dropshipping.

Instead of purchasing an extensive inventory and hoping that it sells, you can start a dropshipping business with zero inventory and immediately start making money.

2. Low Cost of inventory

The cost of inventory is one of the highest costs you’ll have if you own and warehouse stock.

You may end up with obsolete inventory – forcing you to find ways to reduce your stock – or you’ll end up with too little inventory – leading to stockouts and lost revenue.

Dropshipping allows you to avoid these issues and focus on growing your customer base and building your brand.

3. Low Order Fulfillment Costs

Order fulfillment usually requires you to warehouse, organize, track, label, pick and pack, and ship your stock.

Dropshipping lets a 3rd party take care of all of that.

Your only job in this arrangement is to make sure they get your customer orders. Everything else will be handled by them.

4. Sell and Test More Products with Less Risk

Without the constraints of a physical inventory and the costs associated with it, dropshipping allows you to update your inventory quickly, easily, and cheaply.

If you know a product is doing well for another retailer or reseller, you can immediately offer it to your customers without waiting for it to arrive in your warehouse.

Dropshipping allows you to test new items without the risk of carrying obsolete inventory. You only pay for what you sell.

Cons of Dropshipping

1. Less Control Over Order Fulfillment and Lead Times

Even though you don’t carry the cost of warehousing stock, you will pay for dissatisfied customers.

The manufacturers and wholesalers you do business with are responsible for managing and shipping your stock. If they screw up, the customer complains to you or buys from your competitor.

If you start a dropshipping business, make sure you work with high-quality partners.

2. Reliance on Other People’s Stock

Being able to offer new products immediately or stop selling slow-moving products is a major benefit of dropshipping.

The drawback to this perk is that you don’t control your supplier’s inventory. If they run out of stock, YOU run out of stock.

This will result in longer lead times and lost customers.

3. Less Profit

The hidden “cost” of dropshipping is the lack of bulk pricing.

You will likely pay more for each item you sell as compared to paying less for a large inventory of items – leading to less profit.

If you want to earn a lot of money using dropshipping, then you’ll have to sell more products than you otherwise would have if you owned and warehoused them yourself.

4. Poorer Customer Service

If your supplier delivers products late, damages them, delivers the wrong items, or otherwise screws up your customer’s order, the customer will take it out on you.

We already mentioned this problem when it comes to order fulfillment and lead times. But it extends farther than that.

You won’t be able to maintain the personal touch that retailers who manage their own inventory can provide customers. You won’t be able to quickly solve customer issues without overseeing the inventory yourself – you’ll have to deal with your suppliers to solve problems for your customers.

This “man-in-the-middle” way of helping your customers can lead to issues with your suppliers who may take a long time to do what you ask them to do, and with your customers – who will quickly get tired of waiting a long time for their problems to be solved.

Here’s What You Need to Make Dropshipping Easier

Now that you know the pros and cons of dropshipping, it’s important for you to know about a tool that you can use to make dropshipping work better for you.

We mentioned that one of the cons of dropshipping is not being in control of the inventory you’re selling – leading to potential stockouts.

But, you can use a cloud-based inventory management software that integrates with your supplier’s software so that both of you know how much inventory is in stock at any time.

This helps you as a dropshipper synchronize your marketing and sales campaigns with your supplier’s stock.

So, when any of your supplier’s customers make a sale (including you), it will update the amount of inventory in your supplier’s warehouse automatically.

If you want to minimize some of the issues with dropshipping and make it more worthwhile, then you need an inventory management system that tracks your stock levels in real-time.

Where will you find such a system?

Right here at DEAR.

Start your free 14-day trial today

Minimum Order Quantity: What It Is and How to Make It Work for You

Posted on December 16, 2017 by dearsyst

A minimum order quantity is often seen as a necessary evil in wholesaling, retailing, and manufacturing.

Some businesses like it, some businesses hate it, and some businesses have to use it.

But what is a minimum order quantity exactly? What are its benefits for suppliers? And how do buyers effectively deal with it?

Read on to answer all of these questions and learn how suppliers can use minimum order quantities to their advantage and how buyers can make it worth their time.

What Is a Minimum Order Quantity?

A minimum order quantity (MOQ) is the lowest set amount of stock that a supplier is willing to sell. If you can’t purchase the MOQ of a specific product, then the supplier won’t sell it to you.

All MOQs vary, depending on the product.

High-ticket items that cost more to produce will usually have a lower MOQ than low-ticket items that are easy and cheap to produce.

If you’re a buyer, we’ll show you how to navigate MOQs later in this post.

If you’re a supplier, let’s look at what its benefits are to your business.

What Are the Benefits of MOQ’s for Wholesale Suppliers?

The purpose of minimum order quantities is to allow suppliers to increase their profits while getting rid of more inventory more quickly and weeding out the “bargain shoppers” simultaneously.

A minimum order quantity is set based on your total cost of inventory and any other expenses you have to pay before reaping any profit – which means MOQs help wholesalers stay profitable and maintain a healthy cash flow.

Wholesalers don’t always prefer this way of doing business, but in many cases, wholesalers are forced to sell using MOQs because they’re forced to buy a minimum of stock from the manufacturer.

Here’s an example of how to use MOQs in your business:

Let’s say you sell golf balls. For retail customers who are buying in small quantities, you sell one pack of golf balls for $10.

If you want to sell wholesale, then you should reduce your price just enough to make it a good deal for the buyer, while allowing you to make a larger profit and quickly reduce your inventory at the same time – like golf ball packs for $5 a piece with an MOQ of 100 packs.

The goal is to attract a small amount of buyers who purchase the largest amount of your stock.

How Do You Deal With MOQ’s If You’re a Buyer?

Since you know minimum order quantities are often used by wholesalers to find the best buyers and stay profitable, you can attempt to present yourself as their ideal client while negotiating lower prices or looking for the deal that is the most mutually beneficial.

Here are a few tips for dealing with MOQs and making them worthwhile:

1. Negotiate a Lower Price

If you want to make MOQs worth it, then you should start by attempting to negotiate a lower price.

The supplier may not be able to lower the price, but you’ll never know if you don’t ask.

If you develop a good relationship with a supplier, or it’s a slow time of year for them, or if they’ve overstocked their shelves, you’ll have a better chance at persuading a supplier to lower their prices.

But if the supplier is in high-demand with loyal customers, it’ll be difficult to get a deal. In that situation, if you want the product bad enough but don’t want the full minimum quantity, your best course of action would be to pay more to receive less.

2. Buy From Legitimate Wholesale Markets Online

B2B marketplaces like Alibaba or Wholesale Central help you source products from a large variety of suppliers, allowing you to easily compare prices and deals to find the one that matches your needs.

The caveat to online marketplaces is that you should still vet the suppliers you want to buy from, even if the marketplace initially vetted them.

The best part about B2B marketplaces is that you can usually find more low or non-existent MOQs online than you could otherwise.

3. Buy From a Trader

Trading companies can place one order for multiple buyers. This means you can meet the supplier’s minimum order requirement without paying full price and without taking the full inventory.

This lowers the price of the MOQ for all buyers involved and reduces the impact of holding more inventory than you need.

Beyond Minimum Order Quantities

Minimum order quantities are just one tool out of many that suppliers can use to optimize their business.

If you’re selling online wholesale, you should enforce MOQs, but you should also try reducing your shopping cart abandonment or choose the right selling environment when deciding between Amazon Seller Central vs Vendor Central.

Similarly, MOQs are just one of many hurdles that buyers have to overcome.

If you’re buying MOQs, than you should carefully consider your reorder point and rate of inventory turnover.

But If you’re a buyer or a seller, there’s one tool you both should be using:

A cloud-based inventory management system.

This will allow you to know how much you need to sell or buy in real-time, provide accurate forecasts for future demand, and enable easier stocktaking for streamlined productivity.

If you’re sick of Excel inventory management and are looking for a better option, you just found it.

Start your free 14-day trial today

Amazon Seller Central vs Vendor Central: How to Choose

Posted on June 10, 2017 by

Amazon Seller Central vs Vendor Central: Which way should you go?

While the ecommerce landscape ebbs and flows there remains one constant we can’t escape (for now):

Amazon is the single most important platform you can be selling through if you want to stay competitive and profitable.

A 2016 study conducted by Bloomreach Inc., an internet marketing firm, revealed that 55{cb377218d5687e54e8ee9149518f87201a393a7c1db5e8076e9d750029ec0dc3} of consumers use Amazon to search for products as their initial step on the buyer’s journey.

Those figures are up from 44{cb377218d5687e54e8ee9149518f87201a393a7c1db5e8076e9d750029ec0dc3} the previous year and the trend doesn’t seem to be slowing down.

Most wholesalers and retailers begin with Amazon’s Seller Central since it’s the most accessible platform when starting out, but at some point, you’re probably going to consider becoming an Amazon Vendor.

We want to help you make the best decision between the two, so we’ll share with you exactly what these platforms offer, the benefits and drawbacks of each, and how they can help or hinder your ecommerce business.

But first, let’s start by defining their differences.

What’s the Difference Between Amazon Seller Central vs Vendor Central?

The 2 primary ways to make money on Amazon: as a 3rd party seller (Seller Central) or a 1st party seller (Vendor Central).

Let’s take a look at exactly how these interfaces work and what they offer to you.

Seller Central

Seller Central is the interface that allows wholesalers and retailers to list their products for direct purchase from consumers. Amazon considers you a “marketplace” or “3rd party” seller and gives you nearly full control over your brand messaging and marketing.

If you’re selling 40 items or less, you can sign up for an Individual plan without a subscription fee, and you’ll simply be charged $0.99 per item sold plus other selling fees, which vary by category.

If you’re a fairly high volume seller, then you can sign up for the Professional plan which costs $39.99 monthly plus per-item selling fees, which vary by category.

Vendor Central

Vendor Central is the interface used by manufacturers and distributors to sell directly to Amazon. Instead of setting up a consumer facing list of your products, Amazon buys your stock in bulk and sells it for you.

You negotiate a price for your products with Amazon, then Amazon will send you purchase orders which you can fulfill by shipping your stock to Amazon directly. They handle the marketing and you pay a set co-op fee.

Vendor Central is currently invite-only, and Amazon usually reserves their invites for popular brands or big companies who have strong sales and a strong reputation in the market.

However, you can sign up for Vendor Express to begin selling wholesale to Amazon right away and you’ll get most of the same benefits. If you’re selling enough on either Vendor Express or Seller Central, Amazon may ask you to participate in Vendor Central.

Even though Vendor Central and Vendor Express are similar, there are some key differences that we’ll touch on a little later in this article.

For now, let’s look at the benefits of being a Seller vs. being a Vendor if you’re offered that choice.

What Are the Benefits of Seller Central vs Vendor Central?

When choosing which interface to use, or when trying to switch from one interface to the other, it’s critical to know exactly what you’re getting out of the deal.

Let’s take a look at some of the main benefits of Seller Central and Vendor Central, then afterward, we’ll take a look at the drawbacks of both.

Benefits of Seller Central

Price Control

You set your own prices and have full control on when and why you raise or lower them – allowing you to maximize your profits.

Customer Analytics

Seller Central provides a clean and robust analytics dashboard to help you forecast demand and understand your customer’s interactions with your products on Amazon.

Creative Marketing Control

Since you’ll have full control over your listing, you’ll have full creative control over marketing aspects such as what keywords are used, what videos are added, what pictures are displayed, and what strategies are implemented through Amazon’s premium advertising features.

Quick Payouts

Seller Central offers payments every 2 weeks which can be critical to your business if you suffer from lack of cash flow or your profit margins are very slim starting out.

Fulfillment by Amazon (FBA)

If you sell high volume and become a “pro merchant,” Amazon will give you access to their Fulfillment by Amazon (FBA) program whereby they handle your shipping, customer service, and returns.

Benefits of Vendor Central

Amazon Vine Program

Amazon’s Vine program is mainly used for pre-released or new products and allows the top reviewers on Amazon to (hopefully) write great things about your products and give your listings a huge boost in credibility.

More Sales Right Away

Since Amazon buys your products in bulk, you’ll see a larger volume of sales faster than when you sell them one at a time as an Amazon Seller.

A+ Content

A+ Content is essentially an enhanced product listing that expands the basic description field and product images, displays a detailed video explaining your product’s features, provides a comparison chart and generally enhances the look and feel of your product for increased conversions.

Additional Marketing Tools

A+ Content isn’t the only marketing perk offered by Vendor Central, you also get access to Amazon Marketing Services, Amazon Display Advertising, and Amazon’s Subscribe & Save program that consumers use to receive your items on a monthly basis.

“Sold by Amazon” Seal of Approval

Established brands that sell on Amazon as a 3rd party retailer already have high credibility in the eyes of their consumers. But, if you’re relatively unknown, having Amazon put their stamp of approval on your products by displaying them as being “Sold by Amazon” will boost consumer confidence and make it more likely they will buy your product.

What Are the Drawbacks of Seller Central vs Vendor Central?

As many benefits as Seller Central and Vendor Central offer, they each have their own set of drawbacks that you should be aware of.

By contrasting the positives with some of these negatives, you’ll have a more balanced view on which interface best fits your business needs.

Seller Central Drawbacks

High Overhead

With complete control over your product listings comes complete responsibility for your stock maintenance, customer support, shipping, etc. While you can enroll in the FBA program if you’re not selling enough, you may be paying way more in overhead than the service is worth to handle everything until sales pick up.

Basic Product Pages

Unfortunately, if you’re not a Vendor you can only create basic product pages with basic descriptions and you miss out on longer, narrative descriptions, detailed product videos, and comparison charts.

Fierce Competition

Amazon sells well over 300 million products on their platform which creates a fiercely competitive environment for a new seller as much as an established one. You might even start competing with Amazon directly – if they observe a high-performing retailer, they’ll go directly to their manufacturer or distributor and buy wholesale and sell it themselves through Vendor Central if they can.

Vendor Central Drawbacks

Long Wait Times for Payments

Vendor Central pays its sellers after at least 60 days, but they could hold payment all the way up to 90 days, which can obviously hurt if you’re suffering from low cash flow.

Violations of MAP Pricing

Amazon has made it very clear that they don’t adhere to Minimum Advertised Prices and allow retailers, including themselves, to sell products below the manufacturer’s MAP requirements, which can cut into your profit margins if they decide to sell lower than yours.

Poor Seller Support

While 3rd party sellers have access to quick and easy support—since they’re required to manage their own listings—a 1st party seller has very little oversight or input into their product listings. Everything needs to be approved by your account manager, and if you’re not paying for Vendor Central’s extra services, you probably won’t receive preferential support treatment.

What’s The Difference Between Vendor Central vs Vendor Express?

Amazon’s Vendor Express program allows anyone to become a Vendor without being asked to join Vendor Central. It’s very similar to Vendor Central with a few key differences.

Since you may or may not be invited to Vendor Central, but still want to benefit from selling wholesale to Amazon, here are a few key benefits and drawbacks you should know about Vendor Express.

Benefits of Vendor Express

Pay nothing for your products to be warehoused by Amazon.
No wait to get started since it’s open to all sellers.
High turnover rates – so if you have a hot-selling product it could sell even faster through Vendor Express.

Drawbacks to Vendor Express

Net 90 payment terms.
You can only sell 85 items, while Vendor Central offers unlimited product listings.
Amazon is in complete control of how much they sell your products for.

So… How Do You Choose Between Seller Central vs Vendor Central?

If you’re a smaller brand that needs absolute control over your pricing and shipping to maximize growth, then Seller Central is right for you.

If you’re a bigger/quickly growing brand that wants to move a lot of product while letting Amazon manage just about everything for you – go with Vendor Central.

Regardless of which interface you choose, though, you’re going to need an effective system for managing your stock and inventory levels in order to be successful….

Ready to Optimize Your Amazon Business?

With seamless integration of your product listings with Amazon’s marketplace, automatic tracking of your sales, stock levels, and revenue, the right cloud-based inventory management software is an essential tool for the retailer or wholesaler who wants to have complete control over maximizing ROI and growth on Amazon.

Start your free 14-day trial of DEAR Inventory today!

Try DEAR for Free

No Credit Card Required

Inventory Reduction: Grow Your Bottom Line Through Better Operations

Posted on May 20, 2017 by

Overstocked Warehouse in Need of Inventory Reduction

Large volumes of inventory don’t just lead to more management headaches – they can cut into your profits as well.

Of course, you don’t want to have too little inventory and risk losing sales through stock shortages.

So, in starting your company, you’ve erred on the side of caution and just order more than enough to meet your needs.

But storage space, shifts in demand, and lost/damaged goods are all contributing to the costs that eat into your bottom line.

Most businesses have 20-40{cb377218d5687e54e8ee9149518f87201a393a7c1db5e8076e9d750029ec0dc3} of their working capital tied up in inventory – so if you’re closer to the 40{cb377218d5687e54e8ee9149518f87201a393a7c1db5e8076e9d750029ec0dc3} end, it’s probably time to create an inventory reduction strategy.

The goal is to find your inventory sweet spot – where you have the lowest possible inventory levels without being understocked – in order to maximize growth and profitability for your business.

By following the 3 methods we’ve outlined below, you’ll be able to reduce your inventory while retaining just enough to meet fluctuating customer demands and supply chain availabilities.

Lower Lead Times

Lead time is the amount of time it takes for raw materials to reach you after placing a purchase order. They vary widely depending on your supplier’s location relative to yours, their means of shipping, and the types of products you’re buying.

Lead times from local suppliers might be less than a week, while international purchases can take up to a month or more to reach you.

Keeping inventory on hand is the natural method to gracefully handle these fluctuations, but it’s not the only way.

Here are a few ways you can work with your suppliers to lower lead times and reduce your need to keep inventory:

Track Your Existing Lead Times

Track how long it takes for key raw materials to reach your business after placing your orders. Through this, you’ll be able to identify suppliers with the highest lead times and either ask how you can work together to lower them or begin searching for a replacement vendor.

Share Sales Data With Your Suppliers

Sharing sales data allows your suppliers to understand your average order size and frequency, so they’ll be able to anticipate your regular orders and plan ahead to expedite your shipments.

Reduce Minimum Order Quantities (MOQs)

Reducing MOQs allows you to order more frequently so your inventory levels can more closely match the demands of your business, which get’s you one step closer to the whole grail of modern supply chain management – just-in-time manufacturing.

In addition to tracking and working to lower lead times for your raw materials, eliminating obsolete inventory is another great way to reduce your goods on hand.

Eliminate Obsolete Inventory

Inventory carrying costs are generally between 20-30{cb377218d5687e54e8ee9149518f87201a393a7c1db5e8076e9d750029ec0dc3} of the cost to purchase inventory, and for most businesses – especially resellers and wholesalers – roughly 20-30{cb377218d5687e54e8ee9149518f87201a393a7c1db5e8076e9d750029ec0dc3} of inventory is obsolete.

If your company has a carrying cost of 20{cb377218d5687e54e8ee9149518f87201a393a7c1db5e8076e9d750029ec0dc3}, and your total inventory value is $500,000, then your spending around $100,000 a year holding that inventory.

And if you can reduce 10{cb377218d5687e54e8ee9149518f87201a393a7c1db5e8076e9d750029ec0dc3} of that inventory by getting rid of obsolete goods, your business could save $10,000 a year.

How do you eliminate your obsolete inventory?

Rework or Modify

If you’re carrying a set of older models of some of your products, can you have them reworked into the updated model?

Or, can you have inventory that’s been worn from sitting too long refurbished to look and function like new?

While this strategy won’t work for many products, if the cost to modify your stock is less than 25{cb377218d5687e54e8ee9149518f87201a393a7c1db5e8076e9d750029ec0dc3}, and you’re fairly certain it will sell after it’s modified, then reworking it could save you a lot of money.

Offer a Discount

If you can’t rework your stock into an updated model, then your best bet is to slash the price by at least 25{cb377218d5687e54e8ee9149518f87201a393a7c1db5e8076e9d750029ec0dc3}. If you’re still not selling as much as you need to, then keep increasing your discount until you hit the market clearing price or the lowest possible price you can afford to sell at.

While selling at a high discount will negatively impact your revenue in the short-term, over time you’ll lose less money in wasted inventory while clearing more space for higher value inventory that can be sold more quickly at a higher price.

Donate For a Tax Credit

If you can’t modify your products and they’re not selling at discounts you can afford, you might still be able to reduce your losses by donating your excess inventory for a tax credit while saving the cost of waste disposal.

For example, EALgreen is a 501(c)(3) nonpartisan nonprofit that connects companies who have obsolete, outdated, or overstocked goods with Colleges and Universities in need of those goods.

By working with a service like theirs, you’ll get the maximum possible tax write-off and they’ll handle the logistics of delivering your dated goods where they can be put to good use. Win-win!

Improve Inventory Forecasting

By effectively tracking and monitoring your purchasing habits, inventory levels, and sales figures, you’ll be able to more accurately predict the ebb and flow of market demands.

To do this, invest in reliable inventory management software.

This will help you gauge your best-performing products, figure out which times of year you sell the most of your products, and decide where and when you can safely reduce your inventory without risking stock outages.

But what features should you look for in an inventory management software?

Real-Time Tracking and Reporting

Your software should be tracking all purchases, sales, and inventory flows to generate up-to-date reports on all stock sold while automatically updating your inventory levels as raw materials move through your process to the sale.

Integrated Communication

Real-time inventory data is best used by keeping everyone throughout your supply chain is up to date. This helps ensure all your key team members and suppliers are on the same page, your goods will be consistently delivered to your customers, and you can avoid costly stock issues and distribution delays.

Large Volume Inventory Management

Inventory reduction relies on an inventory management system that can effectively track each and every piece of your inventory – especially if the demands of your growing company include ever increasing volumes of raw goods and stock. Your software should help you organize and monitor your entire operation by allowing you to create product families, track thousands of unique SKU’s, and manage multiple warehouses to get a complete picture of all your inventory.

Inventory Reduction FTW

Inventory reduction is absolutely necessary to run a successful wholesale or retail business.

Focusing on reducing lead times from your suppliers, carrying less obsolete stock, and better predicting your future requirements will help you maximize your profits and minimize your losses when it comes to inventory management.

If you want to do all 3 of those steps more effectively…

Reduce Your Inventory with Cloud-Based Management Software

The right inventory software will integrate all your purchasing, inventory, and sales data into easy to use, actionable reports that help you better manage your business by enabling you to make smart decisions – like increasing working capital through inventory reduction.

Start your free 14-day trial of DEAR Inventory today!

Try DEAR for Free

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10 Tips to Thrive with Online Wholesale

Posted on April 29, 2017 by

Increase profit in online wholesale

Thinking about expanding your business by getting into online wholesale?

It can be a scary and stressful venture at first. The downside is that selling wholesale online requires a bit more knowledge and up-front effort than cold-calling or setting up your booth at a tradeshow.

The upside is that once you get going, it’ll be much easier to win new customers, grow your business, and automate your sales.

To help you get started, here’s our list of 10 tips for online wholesale success.

1. Make It Easy for Your Customers to Buy from Your Website

If you want to streamline your wholesale business through online sales, you’ll want to start by optimizing (or creating) your ecommerce website. This means making it as easy as possible for customers to find your products, learn enough to decide to buy, and ultimately place an order with you.

Here are a couple things to keep in mind:

Offer a secure checkout experience by integrating your website with a top online payment processor that includes industry standard encryption.
Accept multiple forms of payment (various credit cards, Paypal, etc.) to allow customers to use their preferred method.
Collect the minimum amount of information needed to process and fulfill the order; name, email, and delivery address will all be required, but fewer details to enter means an easier process and more sales.
Make your site mobile responsive so that any customer, anywhere can buy from you easily.

Getting these right will ensure your customers trust you and are confident when buying from your business.

For a few more tips on streamlining your online wholesale system, check out this list from KissMetrics on making the payment process easier.

2. Join Multiple B2B Ecommerce Marketplaces

A huge part of maximizing your online wholesale efforts is utilizing sales channels beyond and in addition to your company website. Online B2B marketplaces allow you to quickly set up shop on platforms with existing traffic and customers, so you can quickly find new business and expand your reach globally.

Consider both specialty markets like Joor, which targets fashion buyers and sellers, as well as general markets like Wholesale Central.

Check out our post about online wholesale marketplaces to learn more about expanding your online sales channels.

3. Compare Your Prices to Your Competitors

The broader online wholesale marketplace makes it easier than ever to “spy” on your competitors and their pricing strategies. Though most businesses offer wholesale prices at 40-60{cb377218d5687e54e8ee9149518f87201a393a7c1db5e8076e9d750029ec0dc3} of MSRP, researching your market and industry’s exact pricing structure will help you stay that much more competitive.

And wholesalers often choose to create tiered prices for different quantities of stock ordered; for example, you might sell large quantities of t-shirts like this:

100 units at $12.50/each
500 units at $10/each
1000 units at $8.75/each

While there are all sorts of complicated calculations you can do to figure out exactly what you need to charge to remain profitable, especially if you’re a new company, observing your competition, matching and testing out their strategies yourself, and adjusting accordingly is a solid way to get going quickly.

4. Enforce Minimum Orders

A key to profiting at wholesale rates is to require minimum order sizes in order to leverage economies of scale in your favor.

With minimum order sizes, you’ll be able to generate enough cash flow and leverage large volume efficiencies, even at relatively large discounts compared to retail.

There is one exception to this rule…

If you’re a new wholesaler trying to eager to generate new business, consider offering smaller “sample” orders on a one-time basis. This will go a long way in selling customers on the quality of your products while still generating some much-needed cash flow.

And after a sample order is placed, your job is to provide fast fulfillment and excellent customer service to solidify the relationship and create repeat customers – for whom you can and should enforce minimum orders.

5. Offer Dropshipping to Your Customers

Dropshipping is a supply chain management method in which the retailer does not keep goods in stock but instead transfers customer orders and shipment details to you the wholesaler, at which point you ship the goods directly to their customer.

It can be an intimidating process if you’ve built a wholesale-only business, but it’s a good strategy for finding new customers through existing channels when you seem to be hitting a market saturation point.

If you’re interested in pursuing this business model, here’s a great guide to dropshipping from Shopify to help you get started quickly.

6. Earn High-Quality Testimonials

Building trust is essential for all B2B businesses and even more so in the early growth stages.

And social proof is one of the most powerful and achievable ways of quickly building trust with your potential customers.

Enter the testimonial.

From ratings and reviews on ecommerce sites like Amazon or eBay, to snippets of customer comments strategically placed around your calls to action, testimonials are a great way to show those on the fence that you deliver on the promises you make about your products and service.

The easiest way to get a testimonial is by sending a well-timed email to your customers simply asking for one. Allow them time to sell your product and get feedback from their customers in turn, so they’ll be glad to give you a great comment.

Then, send them either a brief survey using tools like Google Forms or Survey Monkey, or ask them to drop a review on a relevant website to make giving that feedback as easy as possible.

To learn more, check out this excellent post about the foolproof method for getting testimonials.

7. Take Excellent Photos of Your Products

If you’re selling physical products online, it’s essential that you help your potential customers understand what your products are like without relying on in-person experiences.

Though, as we mentioned above, you could offer sample orders to get your products into interested hands, this adds a lot of overhead that may be avoidable with the right kind of content.

The most important pieces of product info you can provide are high-quality, comprehensive photos of your products.

To maximize your chances of making the sale, invest in professional photography with simple backgrounds to showcase the best qualities of your products from all angles; offer close-up shots, display your product next to another item to show it’s dimensions, and even consider using a model to wear, hold, or use your product – whatever’s necessary to give potential customers a complete picture (pun intended) of your product before they buy.

More than anything else, great photos of your products will help your prospects and their customers visualize and understand your product making them more likely to buy from you.

8. Write Exciting Product Descriptions

Your product photos will attract interested buyers, but your descriptions will close the sale. To really convince a retailer to carry your product, focus on the benefits your product provides to them and their customers.

How will your products help them stand out from their competition and make more sales?

How will it make their customers lives better, more interesting, more fun?

How will it solve their customer’s problems and pains or help them fulfill their dreams?

Of course, make sure to include relevant features and technical specs like height, weight, different color patterns available, etc.; the more detail the better – be sure to provide all the information customers might want or ask for to maximize your chances of convincing them to buy.

9. Build High-Quality Relationships

Long-lasting businesses are built on long-lasting relationships. And to build these high-value relationships, excellent customer service is essential.

Here are a few things to keep in mind to help you deliver the kind of services that boosts retention rates:

Allow buyers to reach you directly through email
Create an FAQ to counter common objections and answer common questions
Reply to inquiries promptly
Respond to complaints quickly
Go the extra mile to solve customer problems and make them even more willing to do business with you again
Create incentive programs like special pricing for repeat customers

By fostering long-term partnerships with every retailer you work with, you’ll make it easier for them to do business with you – and that much harder to switch to your competitors.

10. Use Modern Inventory Management Software

Since you’re housing product to sell through multiple channels, you’ll need a way to limit the waste that comes from disorganization in order to efficiently scale and maximize profitability.

And the key to operating a streamlined and efficient online wholesale business is inventory management software – which will help you track sales, collect data from all of your sales channels and business apps in one place, generate reports on inventory levels, sales figures, and more, as well as easily manage a high-volume of orders.

Ultimately, with the right inventory management software, you’ll be able to integrate and automate your online wholesale business to reduce the stress of manually tracking inventory and sales, eliminate human errors, and make it just a bit easier to start and grow your business.

Ready to Accelerate Your Online Wholesale Business?

Experience the full benefits of cloud-based inventory management software can provide your online wholesale business.

Start your free 14-day trial of DEAR Inventory today!

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7 Online B2B Marketplaces to Grow Your Wholesale Business

Posted on April 22, 2017 by

Online B2B Marketplaces are a great way to expand your sales channels!

As with just about every type of business, the combination of the internet and other technologies has made it easier than ever to start and/or grow a wholesale business.

And whether you’re a manufacturer looking to quickly and easily distribute your products, or a distributor looking to expand your sales channels, online B2B marketplaces provide a great opportunity for expansion at little additional investment.

But are they the right choice for you?

Sales Calls: The Old (and Expensive) Way of Doing Business

It used to be that making a sale meant having boots on the ground – a team of salespeople making calls and visiting potential customers to pitch your business and products.

And while we’re all about making business easier through modern technology here at Dear, we’ll admit there’s definitely a place for the good old-fashioned cold call.

But for most business, it’s an unnecessarily expensive path to revenue.

The Keller Research Center at Baylor University conducted a study with 50 highly trained and qualified salespeople that backs up this point.

During the study, they had the salespeople make a total of 6,264 phone-based cold calls over a two week period.

Can you guess how many appointments they ended up with?

19.

19 appointments out of thousands of calls; and that’s just to pitch the potential customer, let alone turn that appointment into a purchase order.

What does this mean for your business?

It means your team could potentially be spending fruitless hours chasing leads only to end up with nothing – and if that’s the only method you’re relying on to generate sales, you’re losing customers to your more savvy competitors.

If You Build It They Might Not Come… So Go Where They Are!

And they’re online!

The Internet Retailer 2016 Top 500 Guide revealed that the 26 retailers who disclosed their sales from online marketplaces brought in $455.5 million, or 14.4{cb377218d5687e54e8ee9149518f87201a393a7c1db5e8076e9d750029ec0dc3} of their total $3.17 billion in revenue for 2015.

And those online sales are up 42.9{cb377218d5687e54e8ee9149518f87201a393a7c1db5e8076e9d750029ec0dc3} from $318.8 million worth of goods sold in 2014 for the same 26 retailers.

But there’s more.

A 2016 survey by comScore and UPS found that consumers are now buying more products online than in stores.

The survey polled more than 5,000 consumers who made at least two online purchases in a three-month period. According to results, shoppers now make 51{cb377218d5687e54e8ee9149518f87201a393a7c1db5e8076e9d750029ec0dc3} of their purchases online, compared to 48{cb377218d5687e54e8ee9149518f87201a393a7c1db5e8076e9d750029ec0dc3} in 2015 and 47{cb377218d5687e54e8ee9149518f87201a393a7c1db5e8076e9d750029ec0dc3} in 2014.

And, roughly 190 million U.S. consumers – more than half the population – will shop online this year, according to Forrester Research.

So we know more consumers are shopping online, meaning more retailers are selling online.

Is it possible those same retailers want to take advantage of the convenience of online shopping their customers enjoy?

You bet.

Selling Wholesale to Online Retailers?

But the “name brand” online marketplaces are geared towards consumers – companies like Amazon, Wayfair, Etsy, and eBay generate the overwhelming majority of their sales from retail (though that’s starting to change, eBay and Etsy have now launched wholesale channels).

And sure, you can build your own B2B ecommerce website, which is a great idea.

But driving traffic to your website takes a lot of work and if you’re not already ranking in search engines, thousands of potential customers looking for your products right now aren’t going to find you.

That’s where online B2B marketplaces come in.

These specially crafted ecommerce sites are all about connecting wholesalers, distributors, and retailers so they all can benefit from buying and selling online.

They make it possible for buyers around the globe to find your products and sell them in their businesses, all you need to do is position yourself in front of them.

And unlike calls during business hours, they’ll let you make sales and generate leads 24/7.

But how do you find these online B2B marketplaces?

Well, right here in our list below!

Grow Your Wholesale Business with These 7 Online B2B Marketplaces

Here are a few marketplaces we recommend to help get your search started:

Uppler

Uppler is a powerhouse B2B marketplace that offers a lot of impressive features and different marketplaces for a variety of industries.

When you join they’ll let you:

Create an online “showroom” when you sign up to display your products.
Invite clients and prospects to access your showroom and give them custom made catalogs or newsletters.
Discover which of your products are the most popular.
Create line sheets and pre-populated purchase orders to send to any clients.
Track all your wholesale orders in one, convenient place.

Joor

Joor is the go-to fashion and home goods B2B marketplace.

And in processing over $7 billion in orders every year, they offer a huge opportunity to grow your revenue.

Features include:

Capture orders online or offline
Create permission-based access across reps in different territories
Sell your product in multiple currencies
Real-time reports you can manage on your phone or tablet
An account specialist to walk you through API integration, or anything else you need help with

Amazon Business

Amazon is the titan of online retail and not looking to miss out on an opportunity, they created Amazon Business to enable B2B ecommerce for small businesses and massive enterprise alike.

When you sign up, you’ll create a business profile complete with your logo and company story, and other perks like:

Access to pricing customization tools that are only visible to business customers.
Lower fees on large business transactions in specific B2B categories.
Enhanced product listings with CAD drawings, user guides, and more.
All at the same (or lower) costs as selling retail.

Alibaba

Alibaba is the Amazon of online B2B marketplaces, connecting B2B buyers and sellers in more than 240 countries and regions around the globe.

With a variety of membership levels and value-added services, they offer features like:

Priority Ranking according to membership level
Unlimited Product Posting (for paid memberships)
Product Showcases to help your wares stand out
The ability to quote Buying Requests placed through their Sourcing portal
Verified Seller Icon (again for paid memberships)
Customized Website to display company awards, photos, and videos
Personalized Customer Service for premium package suppliers

FGM Vendors

FGM Vendors is an online wholesale marketplace that acts like a virtual tradeshow for your business.

When you join, you’ll get a professional listing that includes information about your business, photos of your best products, and contact forms that make it easy for potential buyers to reach out.

Additional features include:

List your business and products in as many categories as you’d like
Monthly reports on traffic to your listings
Robust advertising services featuring your ads in hundreds of places across their site, including their homepage
For an additional fee, you can become a Featured Wholesaler and get access to perks like zero pay-per-click fees and preferred placements

Shopify

Shopify has generated over $29 billion for more than 377,500 businesses, and they now offer a wholesale marketplace of their own to connect you with the thousands of retailers using their platform.

It’s fast and easy to sign up – simply fill out this questionnaire and they’ll start emailing you requests from retailers interested in purchasing your products.
Create a customized store using their gorgeous themes.
Easily track sales and growth trends.

Wholesale Central

Wholesale Central has been the largest wholesale directory since 1996 and they make it clear up front – their online marketplace is designed for B2B only, no consumers.

For one low fee, they’ll connect you with thousands of retailers in their “Buyer’s Network” and give you access to features like:

A free ecommerce storefront and software
Unlimited traffic to your storefront
Free promotions in their “Deals and Steals” section
All new members are featured in Independent Retailer Magazine, which reaches over 125,000 independent retail store owners, kiosk operators, distributors, and other wholesale merchandise buyers

Wrapping Up and Ready to Ship

These are just a few of the many online B2B marketplaces out there, but together they offer plenty of opportunities to quickly and easily start reaching more customers.

Now if only there was a way to help you efficiently manage all the new orders you’re about to get…

Grow Your Wholesale Business with Better Inventory Management

Automate and integrate your business systems and sales channels with our easy-to-use inventory management software.

Get started with your free 14-day trial of Dear Inventory today!

Try DEAR for Free

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B2B SEO: Grow Your Traffic with These 10 Tips for Ecommerce Sites

Posted on April 7, 2017 by Alla

Drive More Traffic To Your B2B Ecommerce Site with Better SEO

Are you a driven business owner looking to take over your market through an automated sales funnel?

If so, Search Engine Optimization is critical.

Like SEO in general, B2B SEO is essentially it’s a combination of best practices, good habits, and compound growth.

And while search engine marketing has long been a go-to tool for smart B2B ecommerce businesses, it’s no longer the cherry on top many owners once thought it was.

But how do you optimize your B2B ecommerce website to climb in the search engine rankings, drive more traffic, and grow your sales?

At the highest level, SEO essentially consists of 3 parts:

Keyword research and selection,
On-site or technical SEO,
And link building.

Keep reading for a few tips on each.

B2B Keyword Research

The first step in optimizing your ecommerce site for search engines is to do keyword research – the process of finding words and phrases people are typing into search engines like Google and Bing to find products like yours.

While it might be easier to come up with product names, descriptions, and other website content without thinking about using certain words and phrases, choosing the right keywords and using them in the right places is key (pun intended) to having any chance of appearing in the top results when people search the web.

That being said, our tips for B2B keyword research are:

Create an Intentional Keyword Strategy

It’s not enough to use generic words and phrases that might relate to your business like “bulk t-shirts” or “soy protein powder.”

These are good starts, but they’ll also be highly competitive and crowded with companies spending a fortune on maintaining top rankings.

Finding the right keywords takes a little bit of digging but pays off in the long run – check out Shopify’s Beginner’s Guide To Keyword Research For Ecommerce to learn more!

Use Tools like Google Keyword Planner and Google Trends to Find Great Keywords

To get started with your research, use free tools like Google’s Keyword Planner and Google Trends to get new ideas.

You’ll start by thinking of a few words and phrases that are relevant to your business (“bulk t-shirts”) and plug them into the Keyword Planner (side note: you’ll need to create an Adwords account using your existing Google account – but you don’t need to buy ads to use the tool).

From there, Google will offer hundreds of suggestions and tell you how much traffic, competition, and what the suggested bid is for each.

The rule of thumb is the more traffic the better and you want at least some competition (which proves it’s a valuable keyword).

From there you can compare suggested bids and use Google Trends to identify which keywords are most popular when it’s a close call.

Focus on 1 Keyword Per Page to Start

Moz has an excellent piece on How Many Terms/Phrases you should target on a single page, but as you’re getting started just focus on targeting one word per page to keep things simple.

On-Site SEO for B2B Ecommerce

On-site or technical SEO gets into all sorts of (technical) details, tricks, and hacks that you can spend hours learning about and implementing.

However, with the right website software and a little bit of work on your part, you can cover the essentials without spending a ton of time.

Use Your Keywords in All the Right Places

The SEO experts at Moz have created an excellent Beginner’s Guide to SEO that covers the theory and basic practices of getting your ecommerce website search engine optimized.

One of the critical parts of this when it comes to on-site SEO is placing your keywords in locations where search engines look to figure out what your page is about.

Definitely check out that guide if you have the time, but when it comes to keyword placement you’ll want to use your target words and phrases:

1. In the title tag at least once; try to keep them as close to the beginning as possible.

2. Once in a prominent location near the top of your page.

3. At least two or three times, including variations, in the main copy on your page, maybe more if you have a lot of content.

4. At least once in the alt tag of an image on your page – which helps with both web and image searches.

5. Once in the URL. Also, as a general rule be sure your URLs are readable by humans rather than something generic generated by your content management system, and use a consistent URL structure across your pages.

6. At least once in the meta description tag, which doesn’t help with ranking in search engines but draws attention to your page when people are scanning their search results.

Based on this info, can you tell what keyword we’re targeting in this article?!

Include High-Quality, Long-Form Copy on Every Product Page

While it can be tempting to try to target lots of keywords by creating lots of pages, it’s a lot of work both to create those pages and to increase your rankings for each and every one.

Also, a key factor in search engine rankings is the time visitors stay on your website – so the more valuable content they find, the longer they’ll stay and contribute to your rankings.

For more check out this post on Search Engine Land about the SEO and user science behind long-form content.

Make Sure Search Engines can Understand Your Website

It’s important to note that search engines don’t see web pages the same way we do – all they can “see” is text, and if that text isn’t structured in a way they understand, they won’t be able to accurately rank your pages.

To prevent this, it’s essential that your website has a few key documents – including an XML Sitemap and robots.txt file.

While it’s a technical thing to implement manually, with the right content management system these will be automatically created and formatted without you having to do any extra work.

If your website runs on WordPress (which we highly recommend), check out the Genesis Framework by Studiopress – it has all sorts of security, performance, and SEO improvements baked in to make things easy.

Ecommerce Link Building

Once you’ve discovered a great list of keywords and made sure your website is optimized, the last essential element of B2B SEO for your ecommerce website is link building.

For Google and the like, ranking is all about connecting users looking to find a piece of information or solve a problem with high-quality content and products that meet their needs.

And since high-quality content and products usually attract links from social media and other websites, the number of links pointing to your website is key to boosting your rankings.

Once again this is a complex topic and there are marketing agencies entirely dedicated to ecommerce SEO (including link building), but here are a couple actionable tips you to get you started:

Get Active on Social Media

Just like not having a website in 2002 meant your business didn’t exist, today that’s true of social media.

And not only is a social media presence great for helping potential customers find you, it can contribute to your search engine rankings!

So be sure to actively share and create content for at least one social media platform (for instance, making video product descriptions and adding them to Youtube can be good for this and selling customers who visit your website).

And include “follow” and “share” buttons on your website to make it easy for people interested in your products to stay in touch and spread the word about your company.

To get a better idea of social media’s possibilities, check out this Practical Ecommerce article covering 9 B2B business that do it well.

Be Sure to Blog

Another must-have when it comes to B2B SEO is fresh content.

Like social media this provides multiple benefits: it not only improves your website’s rankings as a whole but also allows you to target more keywords and helps you build trust and likeability with potential customers by helping them solve problems and better understand your business.

For more on why blogging is so important, and get a few ideas to start, check out Shopify’s post on ecommerce blogging.

Sell Your Products through Online Marketplaces

Keeping with the theme of this link building section, selling your products through online marketplaces is not only a great way to grow additional revenue streams (obviously) and get discovered by new customers, but it can also be a great way to drive more traffic to your website and improve your SEO with more links.

But you’re probably thinking – can I really sell my B2B products on websites like Etsy and Amazon?

Well, it might be a stretch – but don’t forget about eBay wholesale and Alibaba, both of which are great places to sell wholesale products on top of the hundreds of other wholesale specialty marketplaces (ever heard of Joor?).

The Final Tip: SEO is About People, Not Algorithms

While it’s perhaps less actionable than the others, this last tip is the most important to keep in mind when working on your B2B SEO.

While it’s important to find the right keywords, put them in all the right places, and get more links to your website, ultimately ranking highly in search engines is about finding and helping people.

Remember, search engines want to show people results that meet their needs – whether that’s information in the form of a high-quality blog post or the perfect merchandise for their retail business.

And you want to find customers who actually want to buy from you – which means targeting keywords that make sense for your business as well as providing high-quality content and products that satisfy and keep them coming back for more.

That’s what we’ve aimed to do with this article and all our products and services here at Dear.

So get out there and start optimizing your B2B ecommerce website’s SEO today – and if you found this article helpful, be sure to share it on social media using one of the buttons below to help us with ours!