5 Tips on Choosing the Right Suppliers for Your eCommerce Business

Finding reliable suppliers is one of the most important things you need to do as an eCommerce business owner. After all, they are the ones who will make your products and deliver them to your customers. But choosing the right supplier can be a daunting task. You may have to do a lot of decision-making when it comes to choosing the right suppliers for your eCommerce business.

For instance, you need to find who has the cheapest product costs so you can sell those at the most affordable prices. Plus, you also need to check if the suppliers can provide you with quality items. And most especially, you need to ensure that they will be able to meet your business’ demands and can deliver fast. These are some of the crucial things you need to look at in advance. Their role is vital in the success of your eCommerce business.

And if you are having a hard time looking for a reliable supplier, then this article is for you. Here, I will be covering the key aspects that every eCommerce business owner needs to know so they can find a perfect partner.

What is a Supplier? 

A supplier is a person or company that provides products or services to a business. He/she is a third-party seller that plays an integral role in the success of your business as you can find quality materials, skills, and services through him/her. However, his/her role is not similar to a vendor that deals directly with customers. The supplier deals with other business owners, entrepreneurs, or other suppliers and manufacturers. His/her main role is to ensure that the needs of his/her customers (business owners and entrepreneurs) are met by procuring the required materials and supplies from the suppliers in the industry at the agreed price. He/she is involved in the production of goods or services.

Why Do You Need to Find Reliable Suppliers?

As I mentioned above, the role of your suppliers is critical in the overall success of your eCommerce business. You need to find the right one that can meet your business’ needs and will be able to produce quality services or products within a given time frame. If they cannot do fast shipping within the agreed timeframe, it has a domino effect and can badly affect your business. Having reliable suppliers allows you to send out the items to your customers. As a result, it makes your customers feel comfortable doing business with and even purchasing from you.

More importantly, you need to find reliable suppliers because of the following reasons:

• They can provide quality products
• They can offer better deals
• They value the business relationship

Find out below why these three matter.

Can Provide Quality Products

One of the advantages of having reliable suppliers is they can provide you with quality products. They review and inspect their products before sending them out to you. They also create and enforce quality control guidelines that limit their production. his ensures a product meets its distribution specifications with minimal defects, which is an important concern for the company to maintain its reputation. Aside from these, they also provide an after-sales service that involves returning goods if there is any defect in the items or if the customer would like to try something else.

Offer Better Deals

Reliable suppliers can offer better deals by offering discounts, loans, and free shipping. If you are running an online business, you should look for suppliers that can provide the most competitive prices for your products. This is beneficial on your part as you can save a lot and earn more.

Values Business Relationship

Another advantage of dealing with reliable suppliers is that they value business relationships with you. When you work with suppliers that value business relationships, they understand how important your company is. They will make sure to deliver the products on time so you will experience any delays. They also stay in touch to communicate about any obstacles that could arise during production or shipping.

4 Types of Suppliers and How Do They Work

Suppliers, in general, are the one that provides you with raw materials or ready-made products. However, not all of them are the same. Different suppliers have their own forte. Before getting a supplier, you need to understand what kind of business you have and how is your eCommerce business is being set up as each of them has various roles. You need to look for the right type of supplier that is compatible with your business model.

In this section, I discussed the four most common types of suppliers and explained each of their functions.

Manufacturer

A manufacturer is a type of supplier that prepares the raw materials and makes those ready-made for its customers. For example, if you have a textile and apparel business, your manufacturer would take the silk and process it into cloth, fabric, garment, weaving, or knitwear.

If your eCommerce store needs a large inventory, the manufacturer is the right supplier for your business. You can purchase in bulk or in minimum order quantities (MOQ). This is advantageous for you because you will get to enjoy a high-profit margin as they sell their products at a lower price. But you need a warehouse to store all the items. As for the shipment, you are the one who will pay for the shipping cost.

Compared to other types of suppliers, the manufacturers offer the most flexibility. However, they can be hard to find. If you opt to get a local manufacturer, I advise that you visit the factory and do the inspection before placing your order. For overseas, a lot of them are based in China. You can also use online marketplaces such as Alibaba, Aliexpress, and eTradeAsia to find the right manufacturer that manufactures the products you are interested to sell. Just install the app to conveniently contact them.

Wholesaler

Wholesalers is another type of supplier but, unlike the manufacturer, they don’t produce the finished product. They simply look for wholesale products that in high-quality yet are low and inexpensive to resell. They ensure that their suppliers can give them the best quality and quantity of those raw materials so they always have customers for the merchandise with negligible risk. For example, if you have a small business and have a place wherein you can store all the products, it is better to get your supplies from a wholesale supplier instead of a manufacturer. Their order quantities are moderate. You do not need to buy in bulk but can still enjoy the wholesale price so you can still get a moderate to a high-profit margin. Pricing can still be lowered down when you order more. Just like when you buy from a manufacturer, you are the one who handles the shipping cost.

To start searching for wholesalers, you can use Google. Just type follow the formula below:

[Your Area] + Wholesale Market

You can also use this formula to be more specific in searching

[Your Area] + Wholesale + [Your Niche]

You can also use online wholesale directories. It is also beneficial to attend trade shows where wholesalers and manufacturers gather and display their products.

Dropshipper

Dropshipping service is an eCommerce practice wherein the supplier only sends the items when the order is placed by the seller. The dropshippers receive information about the order and the buyer. Then, since they already have the name and the address of the buyer, they will directly ship the products to the customers.

This type of business model is particularly beneficial to beginners or small business owners who just started an online store because the order quantities are low. You just need to create a seller account for Amazon or have a Shopify store wherein you can list all the items you want to sell. You don’t need large capital and a warehouse to store to start. You can also sell different types of products from beauty products, home decor, accessories, and pet supplies. Also, you don’t need to worry about the shipping cost and the packaging because the dropshipping supplier will be the one to cover and do this for you.

However, the cost per item is high. Thus, your profit margin is between low and moderate. Another disadvantage is that you cannot check the quality of the products. Also, the dropshipper has full control of the fulfillment process.

Check out my article to know more about dropshipping business.

To look for dropshippers, you can start your search through Alibaba or AliExpress. These platforms are free/ You can also take advantage of their supplier rating system to have an idea of who are the best dropshipping suppliers. Aside from these, you can also use online directories and search via Google to find the best dropshipping companies.

Private Labelling

Private labeling or private label manufacturing refers to the practice wherein one supplier manufactures the products and sells those to another company’s brand. If you want to effectively compete in the market while expanding your reach to a larger customer base, private labeling is the one you need. Producing goods in-house and selling those under your own name enable you to have more control over what is on shelves and allows customization for a new product. You can also enjoy a high-profit margin.

However, the disadvantage to this is the high cost and high order quantities. The seller is also the one who covers the shipment cost. This method only works if your company has enough capital─either through cash flow, the revenue of current materials, or both. You need to create your own brand, pay for the manufacturer, and purchase the items in bulk.

If your business is growing and needs a private label supplier, you can search for them via Google. Just follow the formula below when searching:

[Your Product or Nich] + Private Label Supplier

5 Factors to Consider When Looking For a Supplier

Your suppliers are among the people you rely on. They have a crucial role in your business. Therefore, Therefore, it is necessary that those you will be getting are trustworthy and should be chosen carefully.

Here are the five factors you need to know.

Product Cost

When looking for a supplier, the cost of the products is something not to be overlooked. Cost plays a vital role in whether or not you can maintain that supplier. If you sign with a company that costs more than your business is willing and able to pay, it could put your company’s financial situation at risk and make it harder for growth to occur. But do remember, as I discussed above, the cost of the products varies depending on the quantity you will be purchasing and what type of suppliers you will be getting. But no matter what you choose, the golden rule is to get a product at a cheaper price yet with quality so you sell it to your customers at an affordable price.

Product Quality

Product quality helps you in figuring out whether or not the supplier you are considering can be trusted. You need to ensure that product you will be paying is of a high standard which your business finds valuable. To check it, you can use customers’ ratings and feedback so you can get an idea. Remember that high-quality is always beneficial. Your revenue will increase as customers will keep buying from you because they are satisfied and know that what you are selling is something of excellent quality.

Reliability 

The reliability of suppliers is paramount to the success of a business. They are typically responsible for the goods and services you sell through your eCommerce platform. You need to find reliable suppliers that can deliver your orders on time and with quality materials. Supplier reliability also comes with good customer service. You need to check how responsive they especially if you are doing transactions with overseas suppliers. It is going to be frustrating to communicate with someone who is unresponsive especially if the concern is urgent.

Stability

The stability of a company is one important consideration that you cannot overlook. Its history and reputation in the industry are crucial when deciding whether or not to have business with them. You need to ensure that the supplier you are dealing with remains stable and can still provide for your needs in the years to come. It will be hard for you to find a new one when they suddenly get out of the business right after outsourcing your orders. Their sudden absence will cause a delay in your operation.

Business Values

Lastly, you need to check your suppliers’ business values. This is critical to whether they are compatible with your business. If their values do not match with yours, it can potentially cause conflict in the supply chain. For example, if they do not value professionalism and they do not have the same sense of urgency or commitment, then various issues might arise such as delay in shipment or incomplete delivery.

How to Find a Reliable Supplier for Your eCommerce Business?

Finding a reliable production company for your eCommerce business can create strategic opportunities for growth. However, you should select a trusted supplier in order to make continued success possible. You will want to find a company that offers ease of use with easy returns as well as excellent customer service if you intend on meeting the demands of consumers.

If you are struggling to find one, the following are my practical tips for you.

• Search as many suppliers as you can
• Check their company’s background
• Inquire if their payment terms are negotiable
• Look for their Liability Insurance Certificate
• Review their customers’ feedback.

Let me explain these further to you.

Search As Many Suppliers As You Can

My first tip is to search many suppliers as you can. By going through the process of searching and having multiple options, you can narrow down which company can best be suited for your needs. Also, it allows you to compare the product costs which enables you to negotiate the price and have better deals. Having more choices is also useful especially when your chosen supplier suddenly cannot meet your demands.

Check Their Company’s Background

After listing down your potential suppliers, the next thing you need to do is to check their company’s background thoroughly. You can list down all your questions so you won’t miss anything. Check how long they have been in business. Typically, the risk is high when a supplier has never been in business for more than 3 years. So I advise looking for a company that is established and has been operating for more than 5 years.

Check as well if they have been sued for any legal issues. Companies that pass with an A+ rating are considered publically trusted and have gone through a comprehensive vetting process.

Inquire if Their Payment Terms are Negotiable

Then, inquire if their payment terms are negotiable. This process allows you to negotiate for better deals, including interest-free periods and faster financing. You can ask them the following questions:

• How frequently the payment will be made
• What mode of payment do they accept?
• Do they offer discounts or rebates for bulk or wholesale orders?
• Can you get a refund for damaged items?

Look for Their Liability Insurance Certificate

A good way to find out if the leads are reliable or not is by asking them to provide you with their Liability Insurance Certificate. Every business is required to carry liability insurance. his document protects them from any potential legal issues and moral suits from their customers’ loss of items or even death due to faulty products introduced on the market. Failure to show this can mean that a company may be liable for damages incurred from fire, theft, and other externalities.

On your part, it allows you to put your trust in them. You can expect to receive quality products and excellent customer service when their products are used or provided.

Review Their Customers’ Feedback

Finally, you need to review their customers’ feedback to give you a picture of their business reputation and trustworthiness. Clients’ testimonial allows you to know if they stand behind their promises. On top of that, it helps you find out about any issues that may have occurred in the past such as delays in orders or customers receiving defective products.

Final Thought

Running an eCommerce business is time-consuming and requires a lot of patience. This is more than just selling products online or listing those on your website. Also, to be successful, you need to find reliable suppliers. Their role is essential in growing your business. In a nutshell, they are the ones who provide you with the right goods and services that you need. They will also provide you with support and technical assistance when you need it. And if you have any problems with your products, they will be able to solve them.

So if you are dealing with unreliable manufacturers, I advise looking for a new one. It will be such a waste of time and money. And in a long run, it will badly affect your business reputation and revenue.