Becoming a Vendor for Dollar Tree? Everything's So Intimidating
December 1, 2012 9:44 PM   Subscribe

Becoming a Vendor for Dollar Tree? Everything's So Intimidating

Hey everyone,

I've been thinking about becoming a vendor for Dollar Tree (a chain store selling everything at a dollar). I have never been a vendor before, but I want to start with one item and expand later. I speak fluent Chinese and have found manufactures willing to sell adorable items for very cheap. For example, these pens costs only $0.10 each. I figured that most items at Dollar Tree aren't as pretty, and that I have a chance at reselling things with some profit.

Is there anyone else here who have experience with being a vendor/supplier for a major chain store? Because I feel like everything's so intimidating. First, you have to sign up to be a vendor. Next, you have to have to buy vendor's insurance. Next, you send in samples to be tested and examined. Then, you are told how to package the items and how the label is done. After that, you send in a complete package for review. Once it's proved, then you can ship your items.

It's a bit of a let down seeing how complicated things are. I haven't applied to be a vendor yet.
Do you think I should go on with it? Do I even have a chance?

posted by Thisisbuffalo to Work & Money (6 answers total) 2 users marked this as a favorite
My apologies if you already considered this, but do make sure you are calculating your landed cost on items like the pens. They may cost ten cents each from a factory overseas, but what are the terms of sale? If that ten cents doesn't include the cost of having them delivered to a freight consolidator, insured (if you choose), loaded into a shipping container, delivered to the port, loaded onto an ocean vessel, exported, moved across the globe, imported into the US, cleared through Customs, examined by any number if other government agencies (at the importer's expense, usually) depending on the commodity, picked up from the port, and delivered to Dollar Tree, you could be in for a very unpleasant surprise on that first order.

I can't speak to selling to retailers but I can say that there is some uncertainty in importing, and there are always potential expenses that are out of your control. But there is also money to be made, or else there wouldn't be so many cheap imports on the store shelves.
posted by Balonious Assault at 11:05 PM on December 1, 2012 [1 favorite]

Selling to retailers has lots of risks, including: end users returning lots of products, retailers changing their mind and returning lots of products, retail buyers being reshuffled just when you are ready to go forward and then you have to start all over again with a new buyer, being paid v-e-r-y s-l-o-w-l-y (and possibly being dinged for various obscure credits), etc.

Buying from China has lots of risks, including: not being shipped what you ordered (wrong style, quantity, color, etc.), quality (cosmetic or functional) problems/defects, toxicity (lead, cadmium, etc.), slow delivery (especially before and after Chinese New Year), etc. These risks are probably greatest for cheap, low-end products where it's all about shaving costs (what the Chinese call "cost down"). That often leads to cutting corners that shouldn't be cut. Perceptions about quality and acceptable business behavior are still very different in China compared to the West.

If you can find a pen for $0.10, plenty of other people can too. After all, that's what Alibaba and Global Sources are for. (Plus there are now a lot of China wholesalers such as DHGate selling direct to US end users, and that's another way for importers to identity/source suppliers). So be careful not to think you have a leg up on everyone else lest that lead you to some poor decisions. Now if you had your own designs that you provided to a factory to make, that would be a different story. But of course then you'd have another problem to worry about, which is copying of your designs.
posted by Dansaman at 12:02 AM on December 2, 2012

Dollar Tree has access to the same imports that you would be able to find online. They have a huge operation, would be able to get much better quantity discounts and already have shipping and logistics in place. It's not realistic to start out as a vendor there. To compete with dollar tree's own manufactured products and buyers you'd have to have some serious connections and experience.

If you want to buy things overseas and sell them, you could put together an online store.
posted by Melsky at 2:54 AM on December 2, 2012

I thought that Dollar Tree bought up other people's crap that the other people couldn't sell. The other people write it off as a loss on their books and then sell it to DT for pennies on the dollar. If this is true, your competitors basically lost money selling crap to Dollar Tree. This doesn't seem like a good business plan.
posted by Monday at 3:55 AM on December 2, 2012

Couple things to consider when dealing with dollar type stores... As MELSKY says, it is very much a business based mostly on connections where often times, you have to pay quite a bit of money to get an item in (you pay for the mark down and closeout of something that already exists to keep their margin whole)... You can start tens of thousands of dollars in the hole.

Also as mentioned before, given their connections to China, they more than likely have their own factories or agencies that source goods and can do it without having to deal with start-up companies if they aren't buying written off goods....

It is pure volume based business. Having one item that you sell them at .50 (by the time you get it to the states you need to add whatever shipping and duty costs you have, not sure of this amount for pens, but as an example) means you would need to sell millions of them (turn them over and over) a few times before you re-coup your original start up costs... Given the nature of commodities, this seems like a long-shot.

That said, I wouldn't want to squash your entrepreneurial spirit. Given that you speak fluent Chinese, you could more than likely pay your dues working for a manufacturer stateside and have huge advantage over your co-workers... There are so many things you could do with that ability that could make you decent money, from banking to sales, etc. You could also consult.
posted by priested at 5:31 AM on December 2, 2012

Response by poster: aw okay. Thanks everyone. It's a bit disappointing to know there's so much to have to consider.

The problem with online store is that I would have to sell and ship thousands of items each month by myself, and it would be a lot of work.

I could find a job with minimum wage, and, say, if I work 8 hours a day, that would be $60 a day. If I were to sell those pencils with an online store for a dollar each, I would have to ship out 60 of them a day.
posted by Thisisbuffalo at 9:47 AM on December 2, 2012

« Older Snooze, cuddle, snuggle, ATTACK!!!   |   Do you use Square for more than occasional... Newer »
This thread is closed to new comments.