As an eCommerce entrepreneur, you need to take supplier relationships seriously. Here are some tips for selecting and working with wholesalers and manufacturers.
Understand Your Point of Difference
When you start researching products to sell, you’re likely to be overwhelmed by all the choices. If you’re like many people, you might contact the first few suppliers that show up during an online search. However, this isn’t the best way to go about things. Instead, remember your business positioning. That is, what is your venture’s point of difference?
What do you offer that your competitors don’t, and what do you want customers to expect from your product range? Also, what values do you want your online store to promote? Consider these factors when you research suppliers to stay focused on what you want to achieve and why. For example, if you’re developing an eCommerce store focused on offering unique, unexpected, small-batch or handmade items, there’s no point dealing with suppliers who sell similar gear to other companies.
Don’t Just Consider Price
When considering suppliers and products, don’t hinge all your decisions purely on price. This element is essential, of course, but it’s not everything. You want to choose suppliers who are a good option for many reasons. Look into how reliable suppliers are and whether they’re able or want to scale their operations if the need arises. The last thing you want is to rely on companies to get you in-demand stock, only to find out that the items regularly can’t be delivered or take much longer than expected.
Other elements to examine when comparing suppliers include location and shipping times and costs, customer service, stability, payment terms, and product warranties. Plus, consider what your initial interactions with supplier contacts have been like. Are there any red flags that might make you think twice about dealing with them further? For instance, did they take forever to get back to you, fail to provide you with the information you asked for, or seem rude? These early communications give you clues about what they’ll be like to work with long term.
Check Samples and Read Reviews and Testimonials
To satisfy your customers, you must sell products that are consistently high quality. You don’t want to receive shipments that are excellent one minute and poorly constructed the next. As such, before you sign on with a supplier, take the time to check samples of new lines you’re considering buying or new batches produced later on if you’re buying in bulk at different periods.
Also, read reviews and testimonials not only on supplier websites (where it’s possible content is made up or edited), but also on social media sites.
Ask other retailers you know who have been buying from suppliers for a while how consistent their orders have been. You might also find impartial information in wholesaler magazines or on industry blogs. Chatting to people at tradeshows and conferences can be helpful, too.
Handle Payments Effectively
A vital part of effectively working with eCommerce suppliers is developing excellent relationships with them. Communication is key, so always be friendly and professional and try to get to know people a little more than just on the surface level. In addition, do suppliers the courtesy of paying them on time and in full, so they don’t have to keep chasing you for money.
One way to streamline this side of your operations and reduce the chance of forgetting to pay is to go digital. For example, utilize online payment processing options such as a virtual card. You can use technology to automate payments and reduce the chance of human errors leading to under or over payments, which are a headache for everyone.
Also, if there are any payment-related issues, such as cash flow challenges for you or reasons you don’t want to pay a bill yet (such as faulty or damaged stock), bring this to your supplier’s attention ASAP. It’s better to get problems addressed quickly to reduce the chance of miscommunications and soured relationships.
Want some other ideas for working with your suppliers? Sign agreements that set out terms and renegotiate these terms every year or two. Plus, deal with multiple companies, so all your eggs aren’t in one basket. Always be strategic about your supplier dealings because they are incredibly vital to the success of your online store.
