The Small Retailer Catch-22 - finding suppliers
One of the hardest things to do as a small retailer is finding suppliers who are willing to work with you. Most suppliers will work with you (or agree to sell to you through a distributor), but until you do a significant volume in annual sales your prices may be worse than some of your larger competitors are offering at retail. This is a serious problem and it puts a small business in a catch-22 - do you grow at the expense of profits (through equity funding or a modest credit line) with the idea that you can scale down costs when you have some purchasing power in the hopes that you will then be profitable? This seems like a large gamble.
My suggestion is to shop around - the vast majority of manufacturers won’t work directly with you, but you will find a few here and there that will. You can be profitable as you grow with these relationships and as you become a bigger player in your industry, you will have purchasing power to get decent pricing from other suppliers. The common thing with every large internet retailer is that they started out as small companies that hit a point (sometimes referred to as the “critical mass”) where people finally knew who they were and had confidence in giving them money. The growth during this critical mass resembles the upswing in a J-curve. You are sure to face a lot of growing pains when you hit this point, but to anybody who has every struggled for survival, growing pains sure do feel great.
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