There are major differences between the various types of suppliers of stocks that you can get online and offline. Here’s a basic guide and definition to what is manufacturers, wholesalers, suppliers and retailers.

1. Manufacturers
These are literally the factories where the products are produced and they rarely have a supply channel to online sellers. Manufacturers are, for example, the Sony camera factory or the Prada eyewear factory. The manufacturers work through people further along the supply channel that makes these products available to sellers. (read further). If you can do a deal with a manufacturer (smaller ones will be open to such deals) then your margins will be higher than if you sourced the goods further down the supply line.

2. Wholesalers
A wholesaler generally has a range of good from various manufacturers that are available to physical retail stores and online sellers. These are generally themed wholesalers e.g. sports wear, cycles and accessories, cosmetics, etc. Wholesalers do not sell directly to the public but supply other businesses, including online businesses. Increasingly these wholesalers supply a drop shipping service to online sellers. In other words, you market their goods online, gather orders and they dispatch them to buyer directly from their warehouse, with your paperwork attached.

But traditionally, wholesalers supply the physical market and not the online market. This is changing though. You will have to enquire with the wholesaler how they are positioned to serve online sellers. Their prices are usually in line with the same products available from other wholesalers, but it is up to you to make sure you are not paying more than the going rate for the goods they stock.

Here are some excellent examples of wholesale dealers.

3. Suppliers
A supplier can refer to a wholesale dealer or to a business positioned to serve the wholesale, retail or online market. It is a broad term that includes importers and exporters or even manufacturers who have combined the production of products with the supply of these products. Some suppliers specialize in goods from various countries or from various major names. Some suppliers are closely associated with the manufacturing firm. They might be subsidiaries of manufacturers as well. Some suppliers now specialize in drop shipping goods for online sellers.

4. Retailers
Traditionally these are shops in the mall or on the strip. Even small shops in small towns are on the online bandwagon, selling their goods on auction sites such as eBay or others. If there is a large retail store selling a great range of unique products, there is no reason why you cannot come to an agreement with them to market some of their lines online. They advantage is that they can hold the inventory. The alternative is to see if you can source the same goods further back along the supply chain. Your profits may be greater but you might have to buy and hold inventory if you can’t come to a suitable arrangement with the manufacturer or supplier concerned.