Jason Prescott is the author of the forthcoming book from McGraw-Hill Wholesale 101: A Guide to Product Sourcing for Entrepreneurs and Small Business Owners.
Prescott directs a network of global trade platforms for manufacturers, wholesalers, retailers, importers, discounters and auctioneers, anchored by the websites TopTenWholesale.com and Manufacturer.com. His websites connect buyers and sellers to facilitate global and domestic trade.
In his new book, Prescott shares wholesale sourcing secrets and strategies he’s gleaned through many years of working with retail wholesale suppliers. Prescott feels importing, sourcing, and exporting is something anyone can learn to do wisely and strategically.
Our interview with him follows.“The economy has weeded out weak businesses. Going direct to the importer or manufacturer is getting easier and easier”
Stepping out of the silo
Schepp: What are the latest trends in product sourcing?
Prescott: Most people are now relying on a multipronged method for sourcing new products. In the past, there was sole reliance upon tradeshows and B2B trade pubs.
Now buyers, generally, are able to do an iterative amount of research using a combination of trade platforms like TopTenWholesale.com, Manufacturer.com, and attending tradeshows like ASD, MAGIC, CES and the National Hardware Show.
The other trend has been the weeding out of distributors. Buyers have too many tools at their disposal now.
The economy has weeded out weak businesses. Going direct to the importer or manufacturer is getting easier and easier. Placing product requests now literally takes under two minutes on most trade platforms. Importers and resellers can get quotes from vetted suppliers sometimes in minutes, or just a few hours.
Schepp: In your book you discuss the need for sellers to “step out of the silo.” What do you mean by that and why is it important?
Prescott: The silo is a trap. While we live in what can easily be labeled the most dynamic society ever, I’ve seen much higher percentages of people in the product world rely on archaic methods or stick with the status quo without exploring alternatives.
Ten years ago, it would have been OK to rely on word-of-mouth, a trade magazine or just attend a few tradeshows per year. Now we have wholesale trade platforms, Twitter, Facebook, Pinterest, forums and much more. Stagnancy is an infectious disease that will stunt growth and opportunity in every way.“Stagnancy is an infectious disease that will stunt growth and opportunity in every way. It is so important to network, read, explore sourcing platforms”
It is so important to network, read, explore sourcing platforms, ask questions and be initiative driven.
Best practices to keep in mind
Schepp: You work with a lot of people sourcing products to sell online. What are some best practices you’ve noticed?
Prescott: Never stop at the first supplier and never accept the first quote. Suppliers are a dime a dozen. Unless you are sourcing a one-of-a-kind collectible that has some nostalgic value to you, there is never a need to think you need to work with whoever your friend told you about or that company with a few big booths at a tradeshow you first met in Las Vegas. Some tips I advise:
- Pit suppliers against each other.
- Don’t respond right away when you receive a quote and never appear overly satisfied with the price you are getting.
- [Try] online sourcing. Most credible suppliers now have premium and verified memberships on sites like TopTenWholesale.com, Manufacturer.com, GlobalSources.com, and Made-in-China.com.
- Attend tradeshows overseas. Many suppliers now have much lower minimums. After attending a domestic show like ASD, MAGIC, CES, International Housewares Show, try visiting Canton Fair, YiWu Fair or a textile show in Shanghai. Nowadays, most major shows in the USA also have sourcing sections where credible exporters and manufacturers are subsidized by their governments to exhibit. It may also be a good idea for first timers to seek help from a trade council, like the Hong Kong Trade Council or work with a trading company.
What to avoid
Schepp: What sourcing strategies don’t work well?
Prescott: The worst thing anyone can do is make a transaction without doing proper due diligence.
Don’t pay money to access a wholesale directory—they are usually scams. Stay away from or be extra careful with free members on websites like TopTenWholesale.com, Alibaba.com and other B2B trade platforms.“Research everything. Google is still a great place to begin your research into a company with whom you are thinking of doing business”
Avoid purchasing wholesale lots from drop shippers. Remember they are marking their goods up 20 percent or more. Always try and get to the source. Research everything.
Google is still a great place to begin your research into a company with whom you are thinking of doing business.
Schepp: You advise working directly with manufacturers if possible. Will manufacturers work with sellers buying in relatively small quantities for resale, and how do sellers find those manufacturers?
Prescott: Generally, manufacturers prefer to get container orders. However, many have cut down to smaller production runs on even the smallest and most general of products.
It never hurts to ask. I advise most people to try and find an importer in the USA who works direct with the factory. In most cases, you will get a very similar cost after you take into consideration all the time, effort and skills you need to work with overseas suppliers. If you have the ability to or are ready to start working directly with factories, try the following:
- Visit the sourcing sections at tradeshows like ASD, National Hardware Show, CES, International Housewares Show, Sourcing at MAGIC.
Remember to use payment options like escrow. Do not ever wire the entire pay out amount until you have inspected the goods.
Liquidators offer good opportunities
Schepp: What’s your position on working with liquidators?“Liquidators and closeout companies offer amazing opportunities. They sometimes get a bad rap because a few bad apples spoil it for the rest”
Prescott: Liquidators and closeout companies offer amazing opportunities.
They sometimes get a bad rap because a few bad apples spoil it for the rest. Tens of thousands of small retailers, flea marketers, drop shippers, auctioneers, eBay PowerSellers and Amazon sellers rely on liquidators.
Some of the top liquidators out there include:
Schepp: Using online sites such as TopTenWholesale.com and Manufacturer.com can be intimidating at first, given all the options. What advice do you have for how to best use these sites?
Prescott: Get to know the admin areas first. There are so many tools that, when utilized properly, make your experience very rewarding. Some tips to get the best experience would be:
- Make filling out your profile a priority. It is free to do and also the best way for the system to match you with suppliers.
- Set product alerts. Product alerts will update you every time a supplier comes on board with a product you’re interested in.
- Subscribe to the newsletters. The content is very informative and offers tips, ideas and trends you may not know about.
- Read TopTenWholesale.com/news.
- Explore expert answers areas, such as TopTenWholesale.com/answers.
- Only work with Premium and Supplier Pass® members.
- Make sure you save suppliers and products in your “favorites.”
Thanks, Jason. In Part 2 of this series we’ll discuss tradeshows in more detail, as well as other sourcing opportunities and strategies.