Product Sourcing Research Behind the Scenes (Part One); Transcribed from The Entrepreneur Magazine EBiz Radio Show, 5/02/2005

To Read more Transcripts, or Listen to the Audio Archives of this Radio Show on your computer, and to find the Entrepreneur Magazine EBiz Radio Show Resource Center, please go to www.EBizShow.com

Chris: Thanks for joining us today. I’m Chris Malta and today we’re going to do something that we don’t do much of on this show. We’re going to talk about what my own company does. Everyone knows I host this show with my partner, Rob Cowie. He’s not here today, he’ll be back next week, but what I do is I am the CEO of Worldwide Brands Inc. Now many of our listeners already know this, but for those who don’t we’re a product sourcing research company. That means that our company spends all day, every day, contacting and qualifying real wholesale suppliers who are willing to work with your internet business. Now, we put these companies through the proverbial wringer to make sure they really are wholesalers and not one of the thousands of people who masquerade as wholesalers on the internet get in there. There are a lot of those people out there who are looking to act as middlemen and cheat you out of your profits. We weed those people out, we qualify the real ones, and then we publish that information in our Drop Ship Source Directory and our Light Bulk Wholesale Directory. Now, this show is not a commercial. We just wanted to take you inside the operation of our company to show you what really goes on in finding these wholesalers, working with them, and dealing with the many misconceptions that people have about wholesale suppliers. So, we’ll be talking with three people from my own offices today.

Chris: First we have with us Tisha Rogers who is Worldwide Brands Operations Manager. Hi, Tisha, welcome to the show.

Tisha: Thanks Chris.

Chris: You were a little bit surprised by this weren’t you?

Tisha: Yes I was (laughter).

Chris: (Laughter). This was kind of a last minute thing that Rob and I developed at the end of the week last week and either through my own negligence or Rob’s I guess, neither of us notified the office people that we were going to do this, so Tisha, and Matt and Cindy who will be on later, didn’t know until this morning that we were going to do a radio interview, so…

Tisha: But, we’re happy to do it anyway.

Chris: You know what, you guys are always so good about this stuff, I appreciate that.

Tisha: You’re welcome.

Chris: I wanted to get into maybe first off, Tisha, we could talk about all the misinformation that’s out there on the internet when it comes to wholesale suppliers. Now, you’ve been on the front lines of our company for years. What do you think of the majority of the product sourcing information that comes from search engines and the other stuff that you see out there.

Tisha: A lot of it is not any good, is the simple answer (laughter).

Chris: (Laughter).

Tisha: When I first started working here and when I was doing the product research up front, I wanted to see what comes up when you enter “drop ship” into a search engine. I think I went through so many pages and I think there was only one or two that were actual legitimate companies and then I realized that’s what makes it so difficult for retailers to find these drop ship suppliers. They have to weed through all those middlemen and all those people that pretend to be legitimate suppliers. It’s really difficult to get to the real sources.

Chris: Yeah, especially in the search engines.

Tisha: Exactly.

Chris: I’ve talked to people all the time and I’ve written some stuff for eBay and, by the way, this might be a good opportunity to tell people that any of our listeners who are coming out to eBay Live this year which begins June 23rd, I will be there giving a class on product sourcing at eBay Live and a couple of round tables and doing some speeches here and there, so that should be pretty cool. We’ve been writing a lot of material for that and I’ve been talking to a lot of people about this kind of thing and putting out some new articles, so…the search engines, and Tisha you brought up a really good point, the search engines are a place where wholesalers, real wholesalers, don’t advertise.

Tisha: Right.

Chris: I mean, these people already have established wholesale businesses through the old style channels where they go out to their accounts to, like K-Mart and all the big stores, and they already have their channels. So, now how do real wholesalers perceive an individual internet reseller?

Tisha: Some of them are pretty skeptical of home-based businesses and some of them don’t really understand the concept, especially if they do have those larger retail chain stores that they’re selling to.

Chris: Right.

Tisha: So you have to, of course, present yourself in a very professional manner.

Chris: When you’re dealing with these people they don’t really consider a home-based internet business to be a big source of income for them.

Tisha: Right.

Chris: A real wholesale company is sending out palette loads and truckloads of products to Wal-Mart and K-Mart all day long and then you come along as a home-based business owner and you want to buy a small quantity of something, they don’t think that’s a real big deal for them. Now, that’s not to say anything against home-based business, right?

Tisha: No. They just think, well, why should I do that?

Chris: Exactly.

Tisha: So, some of them, you have to convince some of them and tell them that it is a big business and some of them do come around and other ones it just takes a while for them to come around.

Chris: So, when you’re doing this product sourcing research on your own, when you’re actually looking for real wholesalers, you’re going to run into a lot of brick walls.

Tisha: And run into a lot of “no’s.”

Chris: Right. So, back to the search engines now. You mentioned that looking through the search engines you went through pages and pages and you only found maybe one or two that really were wholesale companies.

Tisha: Right.

Chris: That’s because the real wholesale companies do not want to spend the time and money to advertise and position themselves on the internet because they know they’re going to get a lot of account requests from individual people who are selling from home.

Tisha: Exactly.

Chris: And they don’t see that as a big profit center.

Tisha: Right.

Chris: They don’t think they’re going to make a lot of money at that. So, that’s why they don’t advertise on the internet. On the other hand, who does advertise on the internet?

Tisha: Well, manufacturers do.

Chris: No, I mean the other way.

Tisha: (Laughter) Oh, the negative way.

Chris: (Laughter) Yeah, the bad part.

Tisha: The middlemen and those fake people.

Chris: The middlemen and the fake people.

Tisha: They definitely do.

Chris: Yes, they do. They’re all over the place. I mean, these guys are, what, sitting at home on a home computer and what they’re looking to do is get in the middle. They want to get in between you and the real wholesaler.

Tisha: Right.

Chris: So they tell you they are the wholesaler. Their sweet spot for advertising is the search engines.

Tisha: Exactly.

Chris: So, you went to the search engines and you’re looking through and you can’t find anything, right?

Tisha: Mm-Hm.

Chris: That’s because the real wholesalers just don’t advertise there. You were talking to me a while back about an email that you got. I want to talk a little bit about the people who have gotten so badly cheated out there. Man, you know, we see these emails all the time, don’t we?

Tisha: Mm-Hm.

Chris: And, you see them a lot more than I do. Tisha, being the operations manager, she runs the show over at the office. I mean, she’s over customer service and research and everything that goes on there. But, you were more in customer service before you became operations manager, so you saw a tremendous number of emails and I see a few of them too because a lot of emails get filtered through to me too. So, what were you telling me about an email that you saw from someone recently?

Tisha: Well, it was a person who thought that they thought it was really easy to try and find suppliers for their store, was the one that I was talking to you about. They thought that what we did was really easy so he decided he was going to try it out for himself before he decided to purchase access to our directories.

Chris: Right.

Tisha: He spent one entire week, 8 hours a day, contacting manufacturers and distributors and seeing if any of them would work with him, trying to verify their legitimacy. He only found one in one entire week of research.

Chris: In a 40-hour week.

Tisha: And then that’s when he turned around and decided, well, okay, this is harder than I thought and then, of course, he purchased.

Chris: And you know what, that is the hardest thing to explain to people. And, again, we’re not doing a commercial here, we’re just saying that, how long have we been doing this Tisha, what, five years?

Tisha: Five years.

Chris: A little over five years.

Tisha: Mm-Hm.

Chris: And we have people in our office who do nothing all day long who do the same thing he was doing, right?

Tisha: Exactly.

Chris: Okay, we call and we call and we call and we call. We’re getting our raw data from places like Dun & Bradstreet. You know those lists that we buy that we get all the rough wholesalers from…

Tisha: Right.

Chris: We go to the trade shows. Geez, how many shows did Rob go to this year, do you think?

Tisha: Oh gosh, I know it was over 4 or 5.

Chris: He was in…where was he?

Tisha: He was in Las Vegas, Atlanta, New York, Oregon, he was all over the place.

Chris: Yeah, he went to Los Angeles.

Tisha: Right.

Chris: He went to Seattle.

Tisha: Right.

Chris: It was amazing and he brought back thousands and thousands and thousands of leads, but still, those leads have to be qualified. Now, what I’m trying to get at in this segment basically is, I’m not telling people that you can’t do this yourself, you can, but Tisha, from the example you gave, that’s what we see most often. People will spend a tremendous amount of time trying to find real wholesalers.

Tisha: Mm-Hm.

Chris: And, by the way, the secret to finding a real wholesaler…and I shouldn’t say secret because I hate that kind of advertising, you know?

Tisha: (Laughter) It’s not a secret.

Chris: Right, it’s not a secret. It’s common knowledge if you know it.

Tisha: Exactly.

Chris: If you don’t know it, then someone needs to tell you. But, the best way to find a real wholesaler is to go to the manufacturer, okay, because the manufacturer of any product is going to know who their wholesalers are.

Tisha: Mm-Hm.

Chris: Okay, so you call the manufacturer, I mean, you can pick up a product in a store and look at the back of it and say, okay, RCA was made by Thompson Consumer Electronics, so you can Thompson Consumer Electronics and you say, “I’m a retailer, can you tell me who your wholesalers are?” And they’ll tell you and you call the wholesalers and then you pitch and you say, “I’m a home-based business, can you sell to me? I sell on eBay” or “I sell on my website, how can we work this out?” That’s the best way to go, but even then, Tish, I mean, that’s just a tremendous amount of time, isn’t it?

Tisha: It is, and I tell people that all the time.

Chris: Yep.

Tisha: I even give them the process of doing it, just like what you explained and then they come back and they’re like, “wow, this is harder than I thought.”

Chris: Yeah, and you know, when people look at our Drop Ship Source Directory and Light Bulk Wholesale Directory, and it’s $69.95, and they say, “geez, that’s a lot of money.” Well you know what, five years, 40 hours a week, a whole team of researchers…you got thousands of companies here.

Tisha: And constantly adding more.

Chris: And constantly adding more every day.

Tisha: Mm-Hm.

Chris: So, it’s not a lot of money, and again, I’m sorry, this is not meant to be a commercial, we’re just trying to explain that it really is so much work. But anyway, thanks Tisha for taking some time out today unexpectedly.

Tisha: No problem.

Chris: We’ll be back after this break to continue talking with our own company, Worldwide Brands, about product sourcing research. Matt Hedges from Customer Service will give us an idea about some of the misconceptions people have when it comes to buying it wholesale and selling it online at retail when the Entrepreneur Magazine E-Biz Show continues on wsradio.com, the worldwide leader in internet talk.

To Read more Transcripts, or Listen to the Audio Archives of this Radio Show on your computer, and to find the Entrepreneur Magazine EBiz Radio Show Resource Center, please go to www.EBizShow.com