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Choosing an e-commerce supplier

How to select the right supplier for an e-commerce business

Aside from ramping up branding and rolling out an aggressive advertising strategy, finding a reliable supplier is one of the top priorities of a new e-commerce business owner.

Their reputation as a business depends on their supplier’s ability to hold its end of the bargain⁠—that is, to deliver high-quality products and deliver goods on time to meet customers’ expectations.

Think of choosing a supplier as preventive quality control. Choosing the right business and supplier is also selecting the product quality and efficiency in fulfillment. A poor choice can lead to shipping delays, the wrong product being delivered, and angry customers that would effectively ruin the reputation and overall business.

Hence, careful attention should be paid to selecting a supplier. They are a crucial part of the puzzle and should be solved first before anything else.

Where to find potential suppliers

There are more ways to find a supplier for the business other than searching online. Here are some ideas.

Referrals. Ask around. Get some recommendations from friends or acquaintances who are in the same industry. Suppliers who other business owners vouch for have high trust value, especially if they’re being recommended by someone in the business for a long time.

Online directory sites. Online is still one of the easiest ways to connect with suppliers and find premium quality products for a small business. Making sure the supplier operates in your region is a good start. But finding offshore suppliers who can deliver on time is also a great start.

Online forums. Get advice and useful recommendations from other people who are doing the same via e-commerce forums, discussions, and message boards. Reddit has dedicated subreddits for this purpose as well as popular e-commerce community sites like Shopify. These are great places to ask questions and also learn from others.

Social media. Supplier companies’ social media pages offer valuable information about their services and offers and will give a good idea of their reputation based on customer reviews. It’s also a great place to find interest groups and communities who share tips, questions, and recommendations about everything e-commerce. Additionally, the algorithm will help introduce the company to potential leads the business owner might not find on their own.

Trade press. A trade press, also known as business magazines or trade journals, is a great source of leads for potential business partners and suppliers. Just keep in mind that these companies pay to be published. Business owners can dig for more information about the company they are interested in through a trade magazine.

Trade shows and exhibitions. Business events, conferences, and trade exhibitions help bring together suppliers with potential small business owners and vendors. There are trade show directories available online to keep the organization updated on the events in the area.

Image from Unsplash

Trade associations. Also known as industry trade groups or business associations, these organizations will help business owners find a collective solution to their e-commerce needs. They are formed by a group of merchants and business owners themselves, so their recommendations are also parallel to the organization’s business interests.

Qualities of a good supplier

After identifying potential suppliers, asking the following will help assess their reliability and compatibility with the business.

How do they handle quality complaints and issues?

The supply chain is not flawless and is dependent on a lot of factors. Quality issues are bound to happen now and then. The important question is: How do they manage issues raised by a vendor? Do they own up to the errors and immediately offer to fix the problem?

An effective business partnership is all about trust and accountability. They play a big part in whether or not the supplier can be trusted to carry their end of the deal.

Can they produce the desired product?

This is more than just a yes-no question, but one that entails a thorough audit of their production system and capability. While the best way to verify if a supplier is up to the company’s standards is to visit their location and see. There are other ways to go about doing so

  • Find out if they’re ISO-certified
  • Ask for certifications and licensing
  • Procure product samples first

How familiar are they with the company’s niche and target market?

A company would not want to partner with a supplier who has no experience producing the desired product. A supplier who is already familiar with the product is more likely to also be already familiar with the quality and regulatory issues that come with it.

Ask for buyer references to verify their previous exports. This information can also be located on their supplier profile if using a supplier conglomerate site.

Are they easy to communicate with?

Problems with communication can cause costly issues that reflect on the product and reputation as a business. That’s why it’s important for the business to communicate its wants to their supplier and for them to do the same.

A supplier with English-speaking staff is a good sign that they work with international clients. They should also be upfront about certain key information and not wait to be asked for key information.

Do they willingly cooperate with third-party quality control?

Reliable suppliers will have no qualms about working with third-party quality inspectors to audit their output. They are never late in booking inspections and always assist the inspectors during the process. They will also be willing to address any issues pointed out with a mindset for continuous improvement.

Are they complying with pertinent regulations?

Prospective suppliers should know and adhere to the laws of their country and their target markets and should have verifiable documentation to support the claim. They should carry valid business licenses and common regulatory certifications to prove their operations are legitimate and recognized by the regulatory bodies.

Do they keep clear records?

Being able to keep clear documentation of product quality, requirements, and specifics is a hallmark of a quality supplier. They should also be able to reflect changes and updates on those records so it’s easy to trace issues and resolve problems as they arise.

Do they offer delivery options?

Customers don’t like long wait times and would prefer their orders delivered to them as soon as possible. Manufacturers should be able to work with these demanding deadlines while keeping expected issues and errors at a minimum.

Is it convenient to do business with them?

A business needs to find a supplier they can readily communicate with and who has an efficient system that makes it easy to keep track of the orders and requests. A reliable supplier should be transparent and make it easy for the business to place orders, ask questions, make requests, and communicate using a safe, easy-to-use transacting system.

Image from Pexels

The steps to finding the right supplier

Now, it’s time to take concrete steps to find the right supplier.

1. Set a Criteria

Does a supplier need to deliver products promptly? Is someone needed to be able to dropship products directly to the customers? Does the business need someone responsive and to do business with?

Setting unique and specific criteria is a great way to gauge a supplier. While the list should be flexible, the core requirements should not be compromised.

2. Know Your Options

A list of potential suppliers can be further trimmed down by assessing them based on reputation, previous references, and reviews from other businesses.

3. Call for Bids

Fill out a Request for a Proposal or Request for Quotation form that details all the business’ needs. This is also the right time to ask for more information about policies they may have that may not be available elsewhere to further get a better picture of their reliability as a supplier.

4. Evaluate Bid Submissions

Once the prospects have submitted their bids, it’s time to assess and evaluate them based on the business’ needs and requirements. This is the time to ask them about ISO certifications and licenses to prove their legality and operational validity.

If a supplier has been decided, a business can commit to a short-term contract to test its performance.

5. Monitor the Supplier’s Performance

During this trial run, the business owner must monitor their efficiency and see if they are holding to their commitments. During this short-term contract, the company can conduct performance reviews regularly and communicate them with the supplier. This will help the business owner decide whether they want to continue or terminate the partnership.

Final word

Businesses should settle for no less than the best, and they should not be afraid to ask questions. After all, it’s their money and reputation on the line, so they should make sure they search for suppliers with due diligence and make sure these partners tick the right boxes.

Tagged in:
  1. e-commerce
  2. how to
  3. supplier

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