Running an e-commerce business sounds glamorous. All you need to do is look through YouTube to find dozens of channels telling you how easy it is to make thousands of dollars overnight with an ecommerce business.
However, any online entrepreneur involved with e-commerce will tell you that it takes time and plenty of hard work to get ahead of the competition. One of the most critical decisions you make in your e-commerce business is choosing the best suppliers and the best products to sell in your store.
Finding a supplier that you can build a relationship with is challenging. There are thousands of suppliers covering hundreds of product categories, and most of them don’t headquarter their operations in the United States.
As a result, you’ll have to learn what to look for and what to avoid when dealing with new product suppliers. Let’s unpack the dos and don’ts of choosing a new product supplier for your online business.
Do’s for Deciding on Product Suppliers
Make sure that you follow these tips when conducting your research into selecting new vendors for your e-commerce business. Your suppliers should meet all of these criteria, or find another company that’s willing to meet your terms. In this economy, there are dozens of suppliers ready to fight for your business.
Use a Spreadsheet to Track Suppliers – Open a new spreadsheet to track your supplier’s contact information. Collect the email addresses and contact names of your suppliers, and make additions to the spreadsheet as you learn more about the company you’re dealing with online. Remember to capture all the data around your product pricing to create a pricing model later.
Make a Shortlist and Evaluate Your Finalists – It might take you a day or two to go through all the options available to you when selecting a new product supplier. After you find between 10 to 15-suppliers, you should have enough data on your spreadsheet to understand the average costs involved.
The spreadsheet should also have information on the advantages and disadvantages of each supplier, as well. Make a shortlist of suppliers, and choose three finalists from your results.
Request Product Samples – All suppliers you work with will be willing to send you samples. If you reach out to a supplier with a proposal for selling their product line, they might be ready to send you a sample for free. Or they might issue it to you on a return basis after you finish evaluating its quality.
Test Payment Methods – Test your payment methods to see what your customers like using most. Offer PayPal and credit card processing as a minimum. If you run a local website, take EFT payments and direct deposits as well. If you offer tech goods in your store or on your website, you could accept payment in cryptocurrency, as well.
Evaluate Logistics, Shipping Times, and Freight Costs – Work out your shipping costs for using fulfillment centers for your logistics. Fulfillment centers and drop shipping services can save you plenty of cash on your logistics costs.
Check the Suppliers Reputation – Always do your due diligence on your suppliers. Look for testimonials and reviews.
Evaluate Customer Service – Buy a product from the supplier, and don’t tell them you intend on buying in bulk. After receiving the goods, apply for a refund with the company, and trust their customer service.
Don’ts for Deciding on Product Suppliers
- Don’ts for Deciding on Product Suppliers
- Don’t expect to find the best supplier on your first try.
- Price is not your only deciding factor for selecting the supplier.
- Avoid fake branded products.
- Don’t give suppliers second chances.
In Closing – Keep Tweaking Your Processes
If you want to keep improving your results, make adjustments, and test them. By continually tweaking your processes, you’ll find out what works, and what’s a waste of your time.