Lessons Learned In Business

Distributors / Wholesalers vs. Manufacturer Direct – Wholesale Course Module 2 Part 8

Wholesale System Module 2

This Post is part of the “FREE Wholesale Training Course”.  You can view the entire course listing and introduction to the course here.

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Module 2:  Wholesale Preparation

You can click on each of the links above to go directly to the area of the module the best interests you.  That being said, lets get right into the content!

Want to skip reading the massive wall of text?  After the entire course is released, I will make videos for each of the sections for easier consumption.  Make sure you are on our mailing list to be notified when it’s released!

Distributors / Wholesalers vs. Manufacturer Direct

When walking a trade show, you will see many different booths selling all sorts of products.  Some are brand owners, some are distributors, and some are liquidators.  Doing a google search will give you a ton of different leads.  Which ones are “legit”?

1 billion results google

Brand owners are where you can build the best relationships and find the best deals.  But how do you figure out which is which?  That’s what we will dig into on this part of Module 2.

Before we move on, let’s re-clarify the difference between Manufacturers / Brand Owners vs. Distributors vs. Wholesalers.  In this module, we are assuming the following:

  • Manufacturer = Brand Owner
  • Distributor = Company that carries multiple brands.
  • Wholesaler = Company that carries multiple brands, but may be buying from a distributor.

For more details on this, check out “understanding the supply chain” portion of Module 1 Part 2.

How to identify a brand owner

Sometimes, finding the actual brand owner can be tricky.  Here’s some of the tactics you can use to find the brand owner:

Look on the Amazon listing.

A manufacturer / brand owner may be listed.  Sometimes they will be in the title itself:
manufacturer example amazonSometimes they are in a hyperlink after the word “by”:

manufacturer example amazon 2

How do you know which is the actual brand owner?  Do a little investigative research via Google.  We’ll get into that in a little bit.

Physically look at the product

When looking at a physical product, you will usually see something on the bottom or back of the packaging that says “distributed by” or “manufactured by”.  Sometimes there will just be a name and location.  Here’s a few examples:

jakks pacific example

sun products example

spin master example

Look at their website

There are keys on their website that can tell you if they are a true brand owner or not.

Sometimes, they will have corporate info areas where you can read specifically which licenses they hold:

jakks pacific website

They may have a “find a retailer” link:

breville find a retailer

They may have links for patent information, warranty information, or product registration.

breville registration

They may have something that says “wholesale only”.  Be aware that some distributors will say the same thing, so don’t assume if you just see this it’s a brand owner. Look for other clues.

They may also have a parts section of their site where you can buy replacement parts for their brand.

norpro example

They may have social media accounts.  Make sure to look at the accounts, and see what type of things they are talking about.  If it’s the true brand owner, they should only be talking about their brand!

social media example

They may have a careers section on their site.  Look at the jobs available, and see if it makes sense.

kohler careers

kohler careers example

Keep in mind, not every single site will have every one of these characteristics.  But these are some signals you can use to determine if the site represents a brand owner or not.

Doing a Google Search

There are two different kinds of google searches you will be doing based on your research:

  • You already have what you believe is a brand owner.  You want to verify it, and potentially find contact information.
  • You don’t have a brand owner in mind, and you are doing various searches to find potential leads.

Brand Owner Searches

Going back to the “Look on the Amazon listing” section above, you may not know which of those words might be an actual manufacturer.  Let’s break down the title area of Amazon a little bit to get an idea of what you should search for.

jakks pacific example original

Commas in a title usually are a give away that there are different aspects of the title.

amazon title break down

  1. At the front of the listing, it may or may not have the manufacturer name.  This would be one to potentially search in Google to see if it is.
  2. This one is likely a brand name, which is carried by Jakks Pacific.  You can search this on Google to be sure.
  3. The license name of the item.  You’ll see this a lot for toys and other licensed products. By searching the license in Google, you’ll rarely find suppliers.
  4. The description of the actual item.  Skip this too.
  5. This is supposed to be either the brand name, or the manufacturer name.  It’s not always accurate.  It’s still something good to search in Google for.

Not every title you see will look like this.  Try to break down titles in this method, which allows you to determine which part of it is relevant for you to search in Google.

Looking at the example above, we would want to Google search two things: Jakks Pacific and Hero Portal.  Let’s do that!

jakks pacific google search

The search for Jakks Pacific is extremely easy.  This is obviously a manufacturer / brand owner.  Breaking down each of the signals:

  1. First link is a link directly to their corporate site.
  2. Second link is social media – Facebook.
  3. Third link is a Wikipedia entry for the company.
  4. Forth link is social media – Twitter.
  5. Google is pulling information from Wikipedia on the right hand side.  It specifically says they design toys.
  6. More social media.
  7. People are searching for other similar brands in the industry.

One other thing to note is there are no paid links on this.  Why?  No one can make money off that search term other than Jakks Pacific.  This is another good signal that you’ve found a brand owner.

Time to search for Hero Portal.

hero portal google search

This one is pretty easy to see “Hero Portal” is not a manufacturer / brand owner.  Most of the searches are retailers offering a product.  The only other search that isn’t a retailer is a link to Jakks Pacific.

Finding Leads Via Google Search

Let’s assume you want to find some brand owners by searching for the type of product they may sell.  Here’s some tips to determine which links are likely to be manufacturers / brand owners, and which ones aren’t:

  • Skip retail sites.
  • Skip sponsored ads.
  • Skip Chinese import sites such as Alibaba, Aliexpress, Dhgate, GlobalSources.
  • Skip “wholesale aggregate” sites that supposedly give you all the leads you need for wholesale.  TopTenWholesale is an example.
  • Skip review sites such as Yelp.

View this video to see a live example:

Other Methods

Here are a few other ways you can determine weather a company is the brand owner:

  • Give the company a call!  Ask them!
  • Trademark and Patent searches.  Sometimes the filings will show who the brand owner is.

Why Brand Owners?

You may wonder why we recommend avoiding distributors and secondary wholesalers.  Here’s a few reasons why:

  • Distributors generally only care about volume.  It’s difficult to provide value.
  • Pricing is typically higher with distributors than you can receive directly from the brand owner.
  • Distributors typically don’t care who they are selling to.  This means your competition will likely be higher.
  • You can’t provide additional services to solve problems the brands are having, depending on your business model.

Why Open an account with a distributor?

After saying all that, there are some reasons to open an account with a distributor:

  • Low Volume items.  If there are some products you want to carry, but are all very low volume, you may want to use a distributor for them.  The shipping costs you save by buying multiple low volume items from one company instead of multiple companies may be enough to offset the higher wholesale cost.
  • Cases where the brand owner themselves are out of stock on an item.  You can refill your stock when you would otherwise be unable to.
  • For research purposes.  Distributors will likely carry many brands you’ve never heard of.
  • For testing purposes.  You can buy a small quantity of an item to initially test the market.  This works well for bundles, as well as items that aren’t currently on Amazon.
  • Brand owner will not deal with you at all.  In some industries (grocery and electronics are the big ones), large companies will not talk to you at all.  You have no choice but to purchase from a distributor.

Now that you are an expert in determining who brand owners are, now it’s time to figure out who the ideal targets are for wholesale sourcing!

Before heading on to the next part of this module, how about clicking on the share button below and sharing this article?  Every share makes me want to work even harder on making this course better!

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Continue on to Module 2 Part 9: Ideal targets for wholesale sourcing

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Chris Potter

Chris Potter is an internet entrepreneur that loves working on businesses and helping others with their businesses. He has operated businesses that have sold over $25 million in retail sales, bought and sold a blog design business, and started websites from scratch. Skyrocket your business by joining his Mentoring Program!

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