Forums: Discussions for entrepreneurs and small business.

In a nutshell… My online retail store provides earthborn &
handmade merchandise to our visitors. Mostly our fine crafted
pottery and flower replicas are our heavily marketed by
tradeshow attendance, and local print marketing. I wish I were
in a position where I had more relationships with wholesalers
of this type of product. I am afraid of my one good contact (good
wholesale prices, great quality merchandise) changing
direction and leaving me with no supply. How can I shore up
my supply chain? Where and how should I search for
wholesalers distributing earthborn & handmade products, and
what negotiations can I expect (if any) about price. I am a small
business with very tight profit margins.

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Vincent Wilcox (a.k.a. KRAKR)
Drummer
My band: Letters Make Words

Vincent,

I actually got some more insight to your problem from a reply to another post that you sent (losing your distributor).  Have you looked into finding a logistics company that will act as your entire operations engine?  My background prior to owning my own company has been in supply chain and purchasing in the computer and consumer electronics industry.  There are many smaller companies that don`t have the means or customer reach to house their own inventory and ship it themselves.  The one thing that you will have to figure out is how to secure the funding to purchase a container.  You should be able to negotiate a price that will be pretty close to what your wholesaler was paying.  Then with the savings, look for a logistics company in your area that will warehouse and pick, pack and ship your products.  You will pay them a fee for service, i.e. $x per month per squarefoot of warehouse space rental as well as a set fee for every order picked, packed and shipped.  With a good partner you will be able to electroinically feed your on line orders to them after you processed payment and they should be able to get the package out within a few hours drop shipped directly to your customer with "your" return address label on the package.  This set up will allow you to grow with your company because you are only paying per transaction (aside from the small warehousing fees) and is scalable up and down (up to several containers, etc.)  If you need more explanation on how this works let me know.

Good luck,

Kevin

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Stay tuned...coming soon

Kevin,
I have not thought about the option you have presented. That`s
a good idea. I have been working on gathering my resources to
purchase a container. But I never thought of the convenience of
using pre-existing warehouse and crew. That would solve my
storage problems as well as sporadic labor usage. This is an
idea I will look into. Thank you.

I was beginning to think my question was unclear, or no one
had ideas for resolution. Again, thank you.

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Vincent Wilcox (a.k.a. KRAKR)
Drummer
My band: Letters Make Words

Vincent,

Since you`re up in San Jose you may want to check around Hayward, CA or other areas that are home to many distribution and logistics companies.  You don`t neccesarily have to find one that deals with your type of products, there are plenty of distis that have idle warehouse space that can accomodate a fee for service vendor like you.  UPS and FedEx are picking up there everyday for their eaches (as well as full truckoads and LTL`s) anyway, they don`t have to do anything different to accomodate your products, the label will print out at the packing line just as if it were auto parts or faucets etc.  The brick and mortar superstores figured out long ago to leave their drop ship logistics to distributors where that is their core competency.  When you order a single printer from walmart.com, do you think they actually ship it from one of their warehouses?  Nope, they never touch it, it is dropshipped to the enduser form a third party distributor (Comes with walmart label and packing slip).

Kevin

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Stay tuned...coming soon

The good news for you is that you can burn the candle on both ends. Distributors and wholesalers employ dozens of salespeople in a call center with terminals loaded with CRM software, with the sole purpose of getting retailers to order from them.   If you`re looking for contacts in terms of manufacturers and distributors, that can be easily done.  A few days looking through a trade magazine, a website about earthborn pottery, and even through the offerings of a competing website or business will give you all the information you need.  This is where asking your customers and a few well-scrutinized Google searches can really help you capitalize.

On the other end of the candle, you can shore up who you`re selling to.   BizAttheBeach`s suggestion of outsourcing to a logistics company will let you offer quicker service  to sell to other retailers.  Since you mentioned your business has tight margins, wholesaling is where you may eventually want to be.  Now as for selling to regular customers, you can try getting booths at more trade shows outside the San Jose area and do more targeted print advertising.  Web advertising may be an inexpensive option for you to try out to get leads and push the word-of-mouth that almost all businesses want.

 

 

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"Forget inspirational quotes to keep you going. If by doing what you do, you get an hour every day to relax, be with the ones you love in comfort without doing wrong, then it is all worth it." -Anon.