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How Do You Buy Products Directly From a Manufacturer?

Jul 6, 2020

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When selling products online or in your own store, you want to get the best price. This can is best done by buying directly from a manufacturer. So, I did some research into how to buy directly from a manufacturer, and wrote this helpful article to explain it.

So, how do you buy products directly from a manufacturer? To buy products directly from a manufacturer you need to establish a business relationship with them. This can be done by finding on websites that connect buyers and sellers. After that you can buy products directly from them.

The manufacturer can also send the products to your customers on your behalf, and finding them can be a big task. So, below I will explain how to find good manufacturers and important information about how it all works.

How do you set up a partnership with a manufacturer?

To set up a partnership with a manufacturer you need to be a wholesaler. A wholesaler buys and sells in large quantities, and is a key part of the supply chain.

To become a wholesaler is the same as being a retail store owner. You must set up a business, and have some minimum documentation.

Full step by step how to buy directly from a manufacturer

Manufacturers work with customers who are making large orders. Therefore, you should have a few things set up beforehand to put your best foot forward.

Have a registered business. Manufacturers typically don’t work with people unless they have a registered business for tax purposes.

This is because they have complex legal and tax requirements and it will cause issues for them if they don’t invoice correctly. This also gives them the impression that you are serious because you took the time to get it done.

It is fairly inexpensive or free depending where you live in the world. You should search on your computer and use the location data to give you the best results.

Otherwise, you can search for how to register a business in ____ and put your city or country.

Have a basic website. It doesn’t have to be flashy. You should have atleast a simple website with your personal name or company name.

They are very easy to do yourself these days and some good options are [Squarespace: affiliate link] and [Wix: affiliate link]. You can find many good resources online with examples of good websites.

It should take you about a week to set it up. If you already have a website you should

include it with your application to the wholesale company.

Have an idea of where you will sell the products. Having a clear picture of where you will sell the products will help you when dealing with a manufacturer.

When you are talking back and forward with them they may be curious about how you are going to sell the items.

Contact manufacturers. With the abundance of good manufacturing websites you should take some time to Google round and get familiar with the manufacturers in your niche.

Get a broad overview that way you will compare them based on how much they charge, and how many quality testimonials they have.

What types of products are normally manufactured?

There are two types of goods that are manufactured. They are classified based on how long the last. Durable goods are those that last longer than three years such as furniture, kitchenware, and many others.

Non-durable goods last less than three years. This includes food, drinks, garden supplies, and many others.

Nearly all goods are manufactured at least to some extent. Therefore, you will be able to find a manufacturer regardless of your niche.

But, you need to ensure that you will be getting a good markup for your products. You should do this by doing some mathematics with a spreadsheet. That way you will know what price would be good for you, and the manufacturer.

The biggest manufacturing companies, according to Wikipedia are:

In order from highest revenue down:

Volkswagen Group. Car manufacturer
Toyota Group. Car manufacturer
Apple. Computers, iPads, iPhones.
Samsung. All electronics including computers, appliances, and home theatre systems.
Daimler. Car manufacturer.
General Motors. Car manufacturer.
Foxconn. Makes electronics.
Honda. Car manufacturer.

Somewhat unexpected that most of the biggest manufacturing companies are car manufacturers.

What is the difference between supplier and manufacturer?

A supplier is the middle man between the manufacturer and the customer. Manufacturers invest in expensive manufacturing equipment to produce lots of items. A supplier buys a percentage of what the manufacturer makes.

They can also ask the manufacturer to customise the products they produce for an additional fee. A supplier sells directly to consumers, or to retailers. If they can source the items from a manufacturer for very cheap, they can make considerable money selling to retailers.

A wholesaler on the other hand is also a supplier. A wholesaler buys directly from the manufacturer, and is cheaper to buy from then retailers. Once, you register with a wholesaler you can buy from them at a discounted rate.

Stores like 7/11 buy bulk drinks, icecreams, pastries, and candy bars from wholesalers at about 50% of what they sell them for. This way they make a nice profit.

Manufacturers are usually located in remote regions making delivery times much longer. They have large factories with automated equipment.

Wholesalers on the other hand deal directly with retail stores such as online marketplaces and ecommerce stores. Wholesalers source items from manufacturers. Wholesalers will often get an order for 50 shirts for example.

The shirts will be custom made by the manufacturer. The manufacturer then makes the shirts and sends them to the wholesaler, who sells them to the retailers.

Manufacturers sell more units than a retail store, or online store. They also make items that are customised based on their customers requirements. Manufacturers carry more inventory. They buy in bulk from suppliers. Their typical customer purchases a lot of units at a time.

Some wholesalers provide drop shipping.

What is a good supplier?

A good supplier is one that has a good track record. They should also supply the product you are looking for. Good suppliers sell to many customers. They will buy say 100 units of a product let’s say a bag of organic coffee beans.

Because they buy so many they get a discount. So, they would pay $1.50 for the coffee beans directly from the manufacturer.

They would then sell them to the retailers for $3. The retailers like your local supermarket would sell them for $5+. So all along the way each person is making money.

The end customer is paying for the convenience of being able to buy it very close to their house.

The retailers are paying for being able to buy in a small amount and regularly. The wholesaler is making money by buying them from the manufacturer. Finally, the manufacturer is making money by turning the raw materials into a finished product.

If you are interested in selling your products online you should definitely consider listing with us. The website you are on now is an online marketplace, where we offer free listings.

To do this go to the register an account page which can be accessed by clicking here, to get your free account setup.

Conclusion

To buy products directly from a manufacturer you should have a few things setup. These are getting your business registered, and having a website. From there you can contact the manufacturers and start the business relationship.

You should be careful when looking for suppliers. A good relationship is preferred from some types of suppliers. You should choose one you have a good feeling about.

Otherwise, it will be a drag working with them. Once, you are registered with them you can begin buying directly from them at the discounted rate.