10 Nov Brokering Success Story
Successful Merchandise Brokers
Shawna & Alan Roehl of Midwestern Wholesale
We are primarily online sellers of wholesale quantities of general merchandise.
Our business started in 1993, however, originally we were sellers of wholesale travel packages. After September 2001, our business transitioned from wholesale travel to wholesale general merchandise.
We have several sources for merchandise, although we mainly use about 3-4 suppliers.
We have been working with Via for over 4 years now.
We look for reliability, reputation, fast shipping, good prices and good service in the event of a problem.
We generally keep the lowest mark-up possible and try to give our customers the best deal we can. We make very modest profits on each sale and reply on a large volume of sales for acceptable profits. We believe in the fast nickle over the slow dime and make money over the long-term through continued customer relationships.
We search competitors’ similar products to see how much we can sell a product for. If we can find the product cheaper than the average selling price, we will market the product. We also try to determine if the product is likely to get customer complaints or not. We try to carry items that will result in good customer reviews and repeat orders.
We use several channels. Unfortunately our main website is down for maintenance at the moment. We are revamping the main website and hope to have it back up soon. In the meantime, we list on several online auction and sales websites such as eBay, Craigslist, Overstock and several others. We also sell at a local flea market occasionally.
We get a lot of word of mouth advertising. But otherwise we simply advertise through online auctions and free classified ads.
Our DVD lots have always been our best sellers. However, our product lines often change and we sell a large variety of products. We also sell a lot of swords, knives and cosmetics.
We sell generally to businesses of all sizes. We have a lot of small retail store customers and some large business customers.
In 2005 we did have a supplier steal $13,000. We sent money to them by wire transfer, and they never delivered product. In 2001 we were forced to switch our business from wholesale travel to wholesale general merchandise due to the declining travel industry at the time resulting from the events of September 11th.
We no longer send wire transfers except to a few trusted suppliers.
We have visited some suppliers in person. This can often lead to some knowledge about how a supplier runs their business.
We have learned that there are several pros and cons to running your own business. While it does allow for some personal freedom, it also requires a certain discipline.
Do your research and make a good business plan as a first step. This will serve as a road map. Always be open to advice and always be willing to adapt and change to the market environment.
Our website, Midwestern Wholesaler can be viewed at http://www.midwesternwholesaler.com. You can also visit our eBay store at http://stores.ebay.com/Midwestern-Wholesaler
Insights for Brokers
No matter what your resale channel is, there are certain things you should look for in a supplier such as reliability, good customer service, a consistent flow of product and competitive pricing. However, depending on your particular resale channel – as in Midwestern Wholesale’s case of Dropshipping/Brokering – there are more particular things to keep in mind while setting up your business and deciding which companies you will be sourcing your products from.
Here are some valuable insights for all looking to start or grow their own dropshipping business.
- Always research a potential supplier. Look at their reputation within the indsutry. Read up on what others have said about them on forums, testimonials on the supplier’s own website and other sources. You need to find a reliable source of product, and a supplier who will be willing to work with you in the event that one of your customers is not fully satisfied with a purchase. Check out our blog to see an article about questions you should ask a potential supplier.
- Try to keep your markups low. If your customers can search the internet and find the products you are selling at a price significantly lower than you are offering, there won’t be much incentive for them to buy from you. Brokers generally make their profits on volume rather than on individual sales. Your return per individual order might be small but your profits will grow as you build lasting relationships with your customers and they place repeat orders with you.
- Use several resale channels. Whether you have your own wholesale website or not, the more resale channels you use, the better your chances of moving more product. Take advantage of large online marketplaces like eBay, Craigslist, Amazon, Liquidation.com and such sites to list your wholesale lots in multiple places. The more exposure your lots have, the better. Consider selling at a local flea market in your town or setting up yard sales to supplement your sales as needed.
- Be wary of suppliers who require payment by wire transfer in 100% of cases. Paying for your purchases by Credit Card or Paypal gives you a recourse in case a supplier does not deliver the merchandise. When you do wire money, make sure you’ve established a trusting relationship with a company as some dishonest suppliers may cash in on your wire and never deliver the goods. Although this is fairly rare, it does happen. Paying by Credit Card or Paypal (even though it occasionally means paying a 3-5% service charge), may avoid headaches in the future. Note that some companies only accept wire transfers for large amounts until a relationship of trust is established with their customers – this goes both ways. Do be flexible, but be vigilant as well. Do your research and know where your money is going.
- Whenever possible, try to visit your suppliers. Seeing their physical operation and meeting them in person can enhance your understanding of the product to help you advertise it to your own customers more accurately, and can enhance your working relationship with the account managers you deal with regularly. Many companies exhibit at liquidation and wholesale industry trade shows. If you can’t visit them at their locations, consider attenting an industry trade show. Not only will you get to meet your suppliers face to face, but you’ll be in a room with thousands of other companies and may very well find additional suppliers while you’re there.
- Take into consideration that while starting your own brokering business can seem “easy” and a quick way to make money without ever touching inventory and having to deal with warehousing, shipping and storing merchandise, it does require a lot of research and time on your part. This is a time sensitive industry and your customers will require fast and efficient service. Make sure the suppliers you work with can get you answers to your customers’ questions quickly, and that you make the time to get to emails, questions and complaints quickly to build a good name for your business.