March 1, 2011, 12:00 AM

Buyer Beware

(Page 2 of 2)

Once 3Gorillas.com takes on a new wholesaler, the next step is to negotiate price, he adds. He looks for wholesalers willing to be flexible in buying terms, and may offer to take an entire lot from a supplier in return for a discounted price.

Pure Modern has found it advantageous to expand its online retail footprint to better manage and sell the inventory it acquires. It uses PureModern.com as its flagship e-commerce site for selling the hottest and most unusual products, and it has launched sister niche sites for garden supplies, electronic gadgets, furniture and gifts. The sister sites include more commodities, such as basic planters on the garden site ModernPlanter.com, but also display more unusual and innovative items, such as decorative, stainless steel planters, after they debut on PureModern.com.

3Gorillas takes a different approach. In addition to its one retail site, it also operates wholesale site SmartSurplus.com, where it sells overstock and closeout merchandise. SmartSurplus.com provides an outlet for items that don't sell on 3Gorillas and can help 3Gorillas.com's wholesalers move excess inventory. He adds he is careful not to set retail prices that undercut the retail prices of his wholesale customers.

"We have good relationships with wholesalers who are also our customers," Scriff says.

The fraud at Alibaba underscores the importance of retailers building good relations with suppliers they can trust.

paul@verticalwebmedia.com

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