Over the last few weeks, we have gone over the ins and outs of the main four supplier types: manufacturers, wholesalers, drop shippers and liquidators.

With all that knowledge under your belt, you are probably either itching to get started - or you still have a big question mark hanging over your head!

Either way, we have dedicated this newsletter to helping you decide which supplier is right for you and your business. We've made this newsletter a little bit different from all the others to give you a bit of a break from the heavy reading you have been doing.

To help determine which supplier type best suits your lifestyle and business goals, take our quick quiz below. It aims to help you focus your thinking and make the right decision. If you are still not sure, check out our common seller starting-up situations and see which one matches your situation. 

The Quick-Fire SaleHoo "Which Supplier is Right for Me" Quiz?

Instructions: Print out this page and use a pen to circle the letter most relevant to your situation.

1.      How much storage space do you have available for your inventory?

A.      I plan on renting a storage unit

B.      I have a large empty garage

C.      I'm just going to use my closet or office

D.     I have no storage space at all!

2.      How much money do you have to invest?

A.      $2,000+

B.      $500 - $2,000

C.      $100-$500

D.     I'm really keen to start selling, but I have no money to invest right now

3.      What are you interested in selling?

A.      Only the hottest products like mp3 players and designer jeans

B.      I want to offer my buyers a wide variety of items

C.      Popular sellers like clothing, baby gear or books

D.     I have a great niche idea like golf hats, archery equipment or quick-dry nail polish!

4.      What are you money making goals?

A.      I plan to leave my day job eventually and make this a full time career. I have dollar signs in my eyes!

B.      I just need to make enough money to supplement my income every week

C.      I am retired/a stay-at-home mom/a college student. I just want some pocket money

D.     I need money right now!

5.      How do you plan to manage your business?

A.      I think I will need an inventory management system to help me, and perhaps a part-time staff member to arrange the shipping of items. I will arrange for couriers to pick up outgoing items from my warehouse.

B.      I'll need to invest in auction management software when I start making regular sales

C.      I'll spend an hour or so every night after work keeping an eye on my listings and answering buyer questions

D.     I'm hoping it won't take too much of my time - I don't have much to spare for packing and shipping items.

 

Mostly A's

Wow, sounds like you are ready to knuckle down and get serious about selling! If you want to get the best wholesale prices possible for maximum profit, and compete in a competitive niche, you will need to use a manufacturer.

Mostly B's

You're feeling confident that you can make it in online retail and you are ready to commit. Good for you! A great supplier type for your situation is a liquidator. Make sure you use one who you trust to supply you with quality products which you can resell for great profits to fulfill your ambitious selling plans. 

Mostly C's

Like most online retailers, you're OK with starting out small and gradually increasing your selling volumes later on. You are all about making logical decisions! You're best suited to using a wholesaler who can offer you great deals on popular products like clothing which you know will sell well as long as you work hard.

Mostly D's

Drop ship suppliers just became your new best friend! You will probably remember from our newsletter on drop shippers that they offer newbies plenty of benefits, such as needing no money to get started and no storage space. Just make sure you find one who you can trust 100% to make your online selling a success!

Check Out These Common Seller Starting-out Situations and See Which Apply To You:

Consider using a drop shipper if:

• You have less than $50 to spend on product sourcing
• You want to test a new niche item before you go spending hundreds on a bulk wholesale lot
• You have no storage space and work from your kitchen table
• You are really not comfortable with taking a risk
• You want to expand your product range to include a deeper selection, without investing thousands of dollars into stock.

Drop shippers are great for new sellers in niche markets, as they require no up-front investment.

Consider using a manufacturer if:

• You have your heart and mind set on selling branded goods and successfully competing against others in your niche
• You have done your research and are ready to make a big investment
• You have a fantastic new idea for an item and want to use a manufacturer to turn your idea onto a tangible product!

The idea of selling branded goods is popular among new sellers, but it's a very difficult area to compete in online. Selling the likes of iPods, designer jeans or branded cosmetics is tough, and going directly to the manufacturer or using a bulk wholesaler is essential.

Even some sellers who can afford to buy in large quantities find it difficult to compete with professional online retailers.

It's fantastic that you are so dedicated and have such ambition for your retail business, just make sure you do plenty of research before you make any commitments.

Consider using a liquidator if:

• You want to expand you product range
• You're a Jack of all Trades and know you can fix the broken or seconds stock the liquidator is selling to increase the profits you will earn
• You want cheap and eye-catching brands which will attract buyers to your site

Liquidators often have oodles of different stock, so one way of using them is to test new product opportunities. For example, if you sell dinner sets, and a liquidator offers you some cut-price cutlery, you can use this stock to test out the market and see how buyers respond to it.

Consider using a wholesaler if:

• You want to sell products which are consistently popular among online buyers
• You have around 5-10 hours or more to dedicate to your business once it gets up and running

Using a wholesaler is a fantastic way to develop a start-up business into a successful grown-up one. There are so many wholesalers out there who can sell you great products at amazing prices that you can really make some money from.

Wholesalers are suited to the majority of small business owners. If you are confident that you have a good product to sell from doing market research, and you have successfully sold items already, then a wholesaler is probably the right choice for you

 Refer back to our newsletter on wholesalers for a few quick tips on determining whether your wholesaler is the real deal.

We hope that sheds some light on which supplier type is right for you!

Next time, we start our segment on importing. Importing is certainly one of the best ways to get unique items at very low prices which equates to more sales AND profits for you! Keep an eye out on your email inbox.