Wholesalers Meet Challenges Online

How’s the economy treating you? The conventional wisdom is that a sluggish economy is not good for business, but when you narrow down, especially to wholesalers who target discount stores and other independent retailers, many companies are finding strategies to grow and even thrive. It’s been a banner year for Conklin Fashions, for example, a wholesaler offering tens of thousands of jewelry and accessories items, primarily to dollar stores.

“Right now it looks like this will be our best year in 24 years,” says company president, Jerry Conklin. “That was unexpected. So many other companies in my type of business are downsizing, going out of business, or cutting back on trade show attendance. We’ve added trade shows, and I feature my website at the shows.”

Conklin has put a lot of work into his long running website. “I wanted to be one of the first companies out there with a dynamic site that was database driven, with a shopping cart and auto checkout,” he notes. “At first the technology wasn’t there, but we’ve worked up to the level that we have now. We’re constantly looking for what’s coming up next.” Conklin says that website based businesses are opening all the time, just not good ones. “More and more wholesalers are going to switch over to Internet marketing, but you can’t make the mistake of thinking that just because you put a web page out there, you are going to get business. We have photos of all 40,000 products, with full descriptions. It’s very intense,” he adds. “You can’t just jump into the Internet and be successful. We have a photo department, web design, social media. That’s a whole new frontier.”

But Conklin’s marketing efforts are not confined to the web. “We have eight sales people on staff that serve their own accounts,” he says. “I travel all over the country. I go to well known trade shows and to private ones.” And he is expanding. “We’ve just hired two new employees and we’re looking for three more.” As for his retailer customers suffering in a down market, he says he’s part of the solution. “We sell merchandise that retails for up to $10, and we sell it to dollar stores. We are actually helping the economy by letting consumers extend their buying power.” Conklin also offers other tangible aids to resellers, “We do offer package deals for online customers such as floor displays, free shipping, and discounted prices. For example, preferred customers can get free shipping on smaller orders and private web links with special offers.”

The recent economic downturn has also been good business for MDM International, a manufacturer and wholesaler of tie-dye t-shirts, tank tops, shorts, dresses and hats. “Since the recession started, we’ve only gotten stronger,” says president and owner, Mark Herman. “I think that as more people are unemployed, they’re looking for an item they can take out to the flea market and just make some quick cash. I think the recession is actually helping our business.”

Herman says that he just added a lot of new merchandise to his website. But most customers use the site for product info, and phone in their orders. His customers are not always web savvy. “About 80 to 90 percent of our customer base is flea markets, fairs and festivals. We do have stores as customers too, but in the winter months, we’re pretty dead. April to September is our season,” he says. But there sure is money to be made. The latest hot seller, “We put a peace sign on some of our tie-dye shirts, and those are a huge hit. Anything with a peace sign seems to be very popular.” Herman also says that there is a lot of demand for products with hemp leaf designs.

MDM only sells wholesale, out of its own warehouse in Sunrise, Florida. “The minimum order is 12 items,” says Herman. “I have several customers that buy in volume. You know, there are a lot of people that call up and say, ‘I want to buy in volume, can I have a discount?’ I say, ‘What do you mean, volume?’ They say, ‘Oh, I want to buy four or five dozen.’ To me, volume is 50 dozen or more. We work pretty close, so it’s hard to come down too much, but we do for certain people.”

Business has been more challenging for Golden Resource Trading, according to manager, Jason Chen, but the purse and wallet wholesaler is altering its product mix to fit current trends. “People like fresh products,” says Chen. “Big purses with many pockets are popular. The more colorful, the better.” But more important than style is novelty. “A lot of people are looking for new stuff. If it is new, they like it. Every time we offer new stuff, it sells.”

That applies to the company’s website, newly revamped in March. “We added a shopping cart,” says Chen, “and we find that it is very important to update the site regularly. And our sales through the website are growing.” The company sells hundreds of styles, each in a range of colors, out of its own warehouse. But it also has a showroom in Manhattan, on 30th Street. “We get a lot of walk in traffic. Local street vendors and retailers come to our store to buy. They like to be able to touch the merchandise.”

In addition to street sellers and retailers, Golden Resource does significant wholesale business with flea market sellers and other wholesalers. “Our store front is wholesale only,” says Chen. “Our minimum order is $150, we offer a 5 percent discount on orders over $500, and we offer free shipping for orders over $1,000.”

Stockwell Greetings was founded 12 years ago, and the owners have been in the greeting card business for 25 years. With experience like that, owner, John Fenwick, is confident about what his customers want. “All we do is create greeting cards,” he says. “We believe in making very saleable, fresh new product and offering it to consumers at the lowest price possible.” And even in a down economy, the company is doing just fine. “Consumers always need greeting cards,” says Fenwick. “They might not be able to afford the gift, but they always buy the card. Business is good because our product sells well, it’s made in America, and it’s offered at the best price in the market.”

As a wholesaler, Fenwick feels that Stockwell Greetings offers retailers some strong incentives. “We are a very reliable and steady source of greeting cards for our customers.” And he means it when he talks about price. Cards are 23 cents each, packed in six packs for $1.38. Orders over 150 packs get free freight, and retailers buying large orders can get volume discounts that go as low as 18 cents per card. The minimum order is $50. And of course, the company website is fully ecommerce equipped.
Reliability is also a key selling point for Liquidity Services, the parent company of Liquidation.com. “You can trust us as a source for product,” says Patrick Landis, a director of marketing at the wholesaler. “We are a fully transparent wholesaler online.” What Landis is getting at is the company’s status as a publicly traded firm. Any company that trades on a public stock exchange is required by law to disclose a deep set of data that privately owned companies keep tight to the chest. For example, Liquidation.com’s 700 employees moved $356 million in gross merchandise value last year. That includes company revenue as well as the value of goods that Liquidation sold on a consignment basis. The company takes a ten to 15 percent cut of those deals, and of course gets 100 percent of the sales value of goods it sells from its own warehouses. In 2009, the company reported actual revenue of $236 million, down 10.5 percent from 2008′s record $264 million. The company turned a profit of $5.7 million in 2009, just about half what it earned in 2008.

That openness and transparency is key to Liquidation.com’s success as an auction site, according to Landis. Offering more information about all the players in the market is a company strategy. Liquidation.com just rolled out a new website in mid March, and the new site is designed to give buyers confidence in the sellers. “We now feature seller performance reports,” says Landis. “The buyer can see if the seller has a high rating, cancellation rate, and time to ship to buyers. The level of expertise of the seller is available. Everybody is rated. The sellers have to step up their game.” But more information, adding confidence to the market, is not all the new site offers. “For sellers, there’s a whole new seller area that allows them to upload photos and info for auctions,” says Landis. “On the buyer side, there’s a more modern feel, ease of navigation, and an improved search function. You can feel confident that when you search for keywords, you will find what you are looking for.”

The site is open to any buyer, even consumers, but the lot sizes mean that resellers are far and away the primary customer. “Anyone can get in, but we sell primarily in bulk. It’s more of a business centered buyer,” explains Landis. “Our buyers are required to register. It is free and quick to register and create a user name and password. Accounts are approved in a day or less. We do run checks on user accounts.” The company sells to all types of buyers: small mom and pop shops, companies with one to five stores, kiosks in malls, online retailers, Ebay sellers and power sellers, and swap meet vendors. The range of product sold is huge. “We sell everything from iPods to pneumatic drills to fire truck and ambulance supplies,” he says. “Our biggest categories are apparel, consumer electronics, and computer equipment.”

Landis points out that the companies who sell on the site are being affected by the economy in a way that actually helps Liquidation.com. “Primarily our sellers are major retailers who have warehouse overstocks, stock that was on the store floor that has been pulled from shelves, and merchandise that customers have returned.” And consumers are returning more than usual. “There’s more buyer remorse, so we’ve seen an uptick in returned goods.” That gives an edge to buyers. According to Landis, “we are a source for small businesses to find product at a very low cost. They are able to source product cheaply. Because we have so much product, because we are reputable, we can be that source for small businesses. Cars, shelving, clothing, all the name brands; from the ground up we are here to support a small business person, helping them to stay competitive.”
Helping small business owners is also a priority and a strategic strength for Price Master Corp., a wholesaler specializing in selling a very wide range of goods to corner stores and mom and pop shops. “As our economy got bombarded with record gas prices, followed by the mortgage crises and widespread unemployment,” says marketing manager, Nahid Najimi, “the difficulties faced by the people affected everyone and eventually trickled down to impact our customers, which of course impacts our business.” But she is optimistic. “With every challenge there is opportunity, and we think that many people who have been facing difficulties in their personal lives and in their businesses, try to find alternatives and solutions to their problems. Our existing customers, and those who aren’t yet our customer, when faced with slower sales and rising overhead costs, find it necessary to search for new and profitable products to try to make up for the shortfall. That’s where Price Master adds value to the equation and truly becomes their profit connection by offering thousands of profitable products.”
One big way Price Master is adding value is through its web initiatives, which have evolved over the last ten years. “Our original website was launched in 2000, and we revamped it to what it is today in 2005,” says Najimi. “Initially the website was static and difficult to maintain. Now we are able to continuously update the content with up to date product and pricing information. We’ve added new features over the years, and more are on the way to better serve our customers.”

She does expect to grow online. “Currently our Internet sales are a fraction of our total sales volume, but more and more of our customers are realizing the convenience and benefits of using our website to get information about products, prices, and even place orders. One advantage the website has is that it is available 24/7, and the products and prices get constantly updated with new and exciting items.”
That’s important when you are looking at a large product base. “We offer an extensive product line of 3,000 plus items, in categories such as general merchandise, health and beauty aids, OTC medicine, energy products, c-store items, batteries, lighters, condoms, household products, cigar and tobacco accessories, novelty, automotive, and much more.”

Najimi feels that she has something more to be proud of. “We feature product availability rates of over 95 percent. We do this out of our 100,000 plus square foot distribution center, operated by 40 dedicated, reliable, and experienced employees.” She also serves her customers by being on top of the latest trends. “Energy products, functional beverages, and herbal supplements continue to be popular. Ed Hardy branded products are making a lot of noise.”

Scott McMillin got his start as a wholesaler and a computer wizard, and that background has served him well. “My father owned Memphis Import Company,” he says, “and I grew up in the business. My wife and I started Wholesale Imports (to become Michelle and Scotts Wholesale Imports) in 1989. I have always been a computer geek, so we did digital catalogs and the website early on, but the web business didn’t become really important until about five or six years ago.”

But that website has really pushed actual sales for Michelle and Scotts Wholesale Imports. “Around half of our business comes from the website,” says McMillin. “We just try to make our website as easy to use as possible, and price the merchandise as cheaply as possible. We don’t try to do dropshipping or free shipping as a policy. We prefer to stick to basics and give good product, good service, and a good price. Loyal customers are sent coupons to be used on our website, but these are more of a customer rewards thing rather than a business plan.”

The company sells ladies’ fashion accessories, including jewelry, hair accessories, handbags, etc. “We have about 6,000 active skus at any one time.” And business is doing quite well. “We have seen increases in our business during this “recession,” McMillin reports. We did see a slowdown in the rate of growth for the last six months of 2009. 2010 has been good. You need to sell product that your customers can sell and make money on. That is our one driving idea.”

The following were interviewed for this article:

Jerry Conklin, president
Conklin Fashions
9-11 Johnson St
Bainbridge, NY 13733
Toll Free: 888-563-4411
Tel.: 607-967-3021
Fax: 607-967-3027
Email: orders@wholesalejewelry.net
Website: www.wholesalejewelery.net

Mark Herman, president and owner
MDM International
10875 NW 52nd St, Suite 6&7
Sunrise, FL 33351
Toll Free: 888-737-9722
Fax: 954-739-8851
Email: phyllis@mdmintl.com
Website: www.mdmintl.com

Jason Chen, manager
Golden Resource Trading Inc
135 W. 30th St
New York, NY 10001
Tel.: 212-695-8866
Fax: 212-695-8860
Email: goldenresourcetrading@gmail.com
Website: www.goldenresourceinc.com

John Fenwick, owner
Stockwell Greetings
5410 W. Roosevelt Road
Chicago, IL 60644
Tel.: 877-906-2211
Fax: 877-906-2214
Email: stockwel@stockwellgreetings.com
Website: stockwellgreetings.com

Patrick Landis, director of offline marketing.
Liquidity Services Inc.
1920 L St. NW, 6th Floor
Washington, D.C. 20036
Toll Free: 800-310-4604
Tel.: 202-467-6868
Fax: 202-467-5475
Email: marketing@liquidation.com
Website: www.liquidation.com

Nahid Najimi, marketing manager
Price Master Corporation
57-07 31st St.
Woodside, NY 11377
Toll Free: 800-538-3873
Tel.: 718-626-7779
Fax: 718-626-7788
Email: info@pricemaster.com
Website: www.pricemaster.com

Scott McMillin, co-owner
Michelle and Scott’s Wholesale Imports
4957 Summer Ave
Memphis, TN 38122
Tel.: 901-767-0838
Fax: 901-843-2498
Email: sales@wholesaleimport.com
Website: www.wholesaleimport.com