How a Bad Wholesaler Can Destroy Your Retail Business

Most retailers don’t think of a wholesaler as silent killers; in fact, they think of wholesalers as game-changers who boost their businesses. But you really have to keep in mind that success hinges not only on the quality of your products and the strength of your marketing efforts but also on the reliability and integrity of your supply chain.

Basically, the wholesalers are a major part of your ecosystem; without them, what would your retail even have? In fact, for anyone who wants to become a retailer, this is where they need to start out, knowing that not all wholesalers are the same and knowing how they can destroy your business. Seriously, dealing with a bad one can spell disaster for your retail business. But how could a bad wholesaler actually wreak havoc? Well, here’s what you need to know:

Inconsistent Quality Control

So this is going to be the biggest red flag you’ll need to look out for. Now, a reputable wholesaler should adhere to strict quality control standards to ensure that the products they supply meet your expectations and those of your customers. You should basically be able to trust that they’re always going to give you the best. They know what you want and what your customers want, and they’re not going to give you anything below a certain quality.

Plus, safety will need to be factored in for certain items, and quality and safety go hand in hand; for example, if you’re a home improvement retailer, you’ll want an electrical wholesaler with a good reputation because a faulty product could hurt your customers and your business, as well (such as taking legal action against you).

That alone is a massive nightmare. If you notice that a wholesaler is cutting corners, your customers will complain, leave bad reviews, and, of course, go to other retailers. You don’t want this, and since you hired this wholesaler, the products in your store are your responsibility and, therefore, your fault if they’re bad.

Ethical and Legal Concerns

If your wholesaler is doing shady things, you’re still responsible for it because you chose to have them provide you with inventory for your business. In the business world, just like in real life, you can’t use the excuse of “I didn’t know” because, as a business, you are responsible for doing extensive research before, during, and even after hiring a wholesaler. So you’re 100% responsible.

So, what would fall under ethical or legal concerns? Well, if the wholesaler is using slave labour, for instance, then that’s extremely unethical. Another example would be to have counterfeit goods, violate intellectual property rights, or engage in fraudulent activities; your business could face legal liabilities, fines, or even litigation. Basically, these things are a sure-fire way to tarnish your reputation and to outright destroy your business.

Pricing Games

Chances are, you want to maintain a certain price because this is the price that your audience might only be able to afford, right? Unfortunately, some bad wholesalers may engage in deceptive practices, such as imposing hidden fees, inflating prices, or playing pricing games to maximize their profits at the expense of retailers. This is going to anger your customers, and they’ll probably look for competitors who are selling for a cheaper price instead.