Topic: Member Workshop: Building Supplier Relationships is Very Important Especially for the Holiday Season
Host: worldwidebrandsinc Date: Thursday 07/24 Time: 12:00 p.m. to 1:00 p.m. Pacific time Location: Workshop Board
Description: Building Supplier Relationships is very important for growing your business, increasing your profit margins, and especially for preparing for the Holiday Season. Colette Marshall, Business Development Manager for Product Sourcing Experts WorldwideBrands.com, will explain the key elements in improving your supplier communications and using those skills to prepare for the holiday season with your supplier.
Having direct relationships with your suppliers is a key aspect to your business, but like all relationships, you must work to build them. A professional relationship with your supplier will help you expand your business faster and minimize the growing pains. Today, I’m going to discuss 3 main areas of supplier communications: creating a solid foundation, building on that solid foundation, and addressing holiday pain points.
In the beginning, there are a number of ways that you can find a wholesaler. The recommended method is to identify the product market that you want to sell in, discover what that market is demanding, conduct your market research, and then find a supplier to source the product from.
Worldwide Brands has over 8 years of experience in finding genuine, factory-direct wholesalers that will work with online sellers. As an eBay Certified Solutions Provider, we’ve developed an ever-expanding wholesaler database to help you with the process of researching product ideas and finding suppliers to source those products from.
You can also research wholesalers yourself. To learn more about various methods of finding wholesalers (as well as how to avoid fake suppliers and middlemen), please visit past workshops by WorldwideBrandsInc.
For the purposes of this workshop, I’m going to assume that you have found the supplier that you want to work with. I am also going to assume that you have established that they will work with you as online seller and allow their products to be sold on eBay. It is very important to establish this upfront. NEVER hide the fact that you plan to sell a supplier’s products on eBay or online. If you do, they WILL find out eventually and you’ll wind up running auctions that you can’t get products for. Open communication and honesty are both key elements in building those successful relationships with your suppliers.
Set up your account with the supplier True manufacturers and factory-direct wholesalers will always ask you to set up an account with them. Remember, this is a business for both of you. The supplier wants to move product in and out of their warehouses as fast as possible. They need certain information for billing and shipping purposes.
Common Items on Account Setup form: - Business Name And Tax ID, for U.S. wholesalers
In order to work with a GENUINE Wholesale Supplier, you DO need to have a state registered business name and tax ID. It has nothing to do with where you sell; it's who you BUY FROM.
REAL Wholesalers are required by law to keep your tax ID on file and must have proof that YOU are a legitimate retailer. If you are working with a supplier who says they are a wholesaler but doesn’t ask for your registered business name and tax ID, there is a very high probability that they are NOT a genuine wholesaler!
If you do not have a registered business name and tax ID, then do not worry. Those items are NOT that hard to get. Just contact your local County Clerks Office and they will direct you (usually to a state website) where you can easily file online and be registered within a few days (sometimes even sooner!)
International sellers As an international retailer, you will not be required to provide a tax ID to U.S. wholesalers unless they have a presence in the country in which you are located. You will, however, need to provide proof that you are a legitimate business. This means you will have to supply a registered business name to the suppliers you want to work with. If you need help getting legal, you should contact your local city hall or government agency. They should have details on where to go and what to do to become a registered business in your location. You can also locate information online as to how to setup a legal business in your country. Understand that not all suppliers can work with international retailers because of trade and export agreements that they have with their manufacturers regarding selling outside the US.
Business address, phone, fax, hours of operation, length of time in business A supplier needs to know the best times to contact you. In addition, they want to know that you are a serious business that they can rely on to keep their products moving. That’s why it’s important to project a professional image when you communicate with your suppliers. When you send emails, be polite, get to the point, and always use your spell checker. While your grammar doesn’t need to be perfect, a sloppily written email that is filled with typos sends the message that you are either lazy or incompetent, and not a serious business-person.
Whenever you call a supplier, make sure that you don’t have loud pets in the background or kids screaming in your other ear. There’s nothing wrong with working from home, but you need to realize that distracting noises in the background can give you an unprofessional image. An office environment would not have rock music or Jerry Springer blaring in the background.
You will likely be asked how long you’ve been in business. Don’t be afraid to tell them if you are a new retailer. Many suppliers will work with new sellers, and again, it’s critical to your relationship that you are honest from the get-go. It’s much better to get a “No” upfront, than to have a supplier cut you off when you have already have their products listed all over eBay.
Trade and bank references, Dunn & Bradstreet number Many wholesalers will request bank references to confirm your business’ account legitimacy. This is especially true when you are purchasing in large bulk or are requesting credit terms. Like any other business, a supplier needs reassurance of payment.
Most suppliers will also ask for trade references. This simply refers to other suppliers you’ve worked with, who can vouch that you were a good steady customer who always paid on time. If you have worked with other wholesalers, you can easily provide these. If not, simply explain that you’re new to retail and have not worked with other wholesalers in the past.
Understand that the reason suppliers are asking for trade references, and the reason that they’re asking for a Dunn & Bradstreet number (which is a business credit reporting agency), is often because they expect to extend you credit terms. If you tell them that you would like to pay for your products by credit card as you go, they may be more willing to give you an account even if you don’t have the trade references they desire.
Then, as they see that you are a good customer and can provide them with a steady stream of orders, they will be more open to extending you credit terms. As you build that relationship, you will be in a better position to ask, because they know you and like working with you.
Physical storefront Some wholesalers will request photographs of your physical storefront. Generally, these wholesalers will not work with online retailers. Often, this is because they carry high-end brand name items and are only allowed by the manufacturers of their products to sell to retailers who sell in certain physical locations (i.e. ritzy storefronts in expensive areas of town).
If you’re asked for a storefront photograph, be honest and explain that you are an online retailer who sells on the eBay platform. They will let you know if they have products within their catalog that you can sell or whether the account setup process cannot continue. Again, it’s better to be shutdown early, than have your account shutdown in the middle of an auction.
Be patient and plan for a delay in account setup Submitting an application can be done via phone, website or email. If a supplier does not indicate a preferred method of contact on their website, than go with the method that is most comfortable for you. Within our wholesaler database, we have a direct application process as well.
We recommend you allow 7-10 business days after submitting an application, before you contact the supplier about the status of your account setup. Some suppliers will set up your account within 24 hours; others have a much longer process due to their size and account review process. Make sure to plan for a delay in getting your account details. Don’t expect to be setup and ready to start selling the next day with every supplier.
It’s also important to note that, during the holiday season, ALL wholesalers are extremely busy and will take longer to get back to you than they might otherwise – regardless of the topic. Of course, the holidays are NOT the time you should be setting up your wholesale accounts. If you haven’t done so already, then NOW is the time to set those accounts up and begin getting your holiday product line-up in order.
Get a representative’s name, email address, and telephone and fax numbers When setting up your account, make sure that you get all the necessary information from your dedicated account representative, so you can contact them if you need to. This will make it easier when you have questions about an order that shipped or did not ship, or the current status on inventory, etc.
Build on that foundation Once your account is set up, you can begin to build on the relationship that you have established. There are some simple actions that you can take to be the kind of customer that you like to deal with in your own eBay business. Here are some tips to developing good relationships with your suppliers:
Read the supplier’s policies and procedures The wholesaler’s policies and procedures will always detail how to submit orders and send payments. Make sure you read through the supplier’s procedures instead of calling and asking basic questions on how to submit orders. The same is true for their terms and conditions, and any other information they make available on their site. If you have a question, look through their literature and their website and see if you can find the answer there first – you may be surprised at how many of your questions are answered right there.
Know the supplier’s ordering process and how it affects your advertised shipping times In the supplier’s procedures, they will indicate their shipping times. Make sure to read this and take note of it. You don’t want to list that a product will “ship next day” when the actual time frame is 24-48 hours.
In addition, suppliers will not ship your product unless they have received payment for the product – especially with drop shipping. For example, if you send an email request for a product late in the evening on the day you receive the order; then your supplier sends you an invoice for that order the next day; but you don’t submit the payment for the invoice until late the following evening... the shipping time on that order is going to be greatly delayed. Make sure to account for all this in the time that you state in your auction listing.
Don’t constantly contact the supplier for every little question Instead of picking up the phone every time you have a question, compile a list of questions (for which you cannot locate an answer, either in their print materials or on their website), and then send an email to your representative or give them a call, depending on their preferred method of contact.
Keep in mind that suppliers are in the business of getting your products out the door as fast as possible. They don’t always have a full-time customer service team. While their reps can give you information about their products and their processes, they are not there to help you list your products, drive more traffic, or run your business. Make sure the questions you are asking them are appropriate to your specific relationship.
Receive the supplier’s newsletter if they offer one, and read it Many suppliers provide a newsletter that details upcoming specials and new products. They’ll also list important information about your accounts or any events that may impact your orders’ shipping. Make sure to sign up for the supplier’s newsletter and read it thoroughly. Also, keep an eye on the supplier’s website for updated information.
Know the supplier’s current inventory stats, to avoid back-orders and shipping delays Unless you have exclusive rights to the sale of a product, there are other sellers that the supplier is feeding from their inventory. Always make sure to check a supplier’s inventory statistics, particularly on your fastest-moving products, so that you can avoid back-orders and delays in shipping.
Many suppliers offer real-time inventory on their website. If you see that a supplier is low on a particular item, you might consider removing any listings for that product until your supplier restocks. Some suppliers also enable you to set up alerts that notify you when the products that you’re watching fall below a certain level.
If you’re drop shipping your products, we also recommend that you purchase some of your best-selling products and keep them on hand in case you run into an out-of-stock situation. You will still be able to fill the order from your own supply, and will not lose repeat business or garner negative feedback.
Plan ahead and share your plans with your supplier If you want to run a sale or special on a product or products, and you expect to see a significantly higher number of orders than usual, let your supplier representative know. This enables your supplier to adjust their own inventory plans. They may decide they need to submit a larger order to the manufacturer, or to order sooner to allow for lead time and avoid an out-of-stock situation.
Request samples of product from your supplier Samples of product are sometimes offered at account setup; but as a new account, suppliers may want to see your order potential first. Once you’ve shown that you can deliver consistent orders, ask your representative if you can have samples of other products that you’re interested in selling. Suppliers are usually quite happy to help increase sales.
Preparing for the holiday season Suppliers are always several months ahead of sellers in preparing for the holiday season. By June, most suppliers have already completed their research and set their orders for the holiday season with their manufacturers. They spend June and July working on clearing out old inventory to make way for the new shipments.
For sellers, holiday preparation usually begins around June. So if you sell on eBay, then YOUR HOLIDAY SEASON HAS ALREADY BEGUN! Since holiday sales account for a disproportionate percentage of a retailer’s annual sales total, it’s extremely important that you prepare NOW for the buying frenzy that consumers will experience several months down the road. As a seller, here are some tips for planning for the holiday season:
• For June and July, all sellers should be researching and testing what they want to sell for the holiday season • Communicate your plans with your suppliers so that they can make sure their inventory includes the items that you plan to sell. However, you also need to check out their catalogs and see what their available inventory will be during the holidays. You don’t want waste time researching a product that you won’t be able to supply to your holiday shoppers • Identify trends and keywords, and set your marketing to prepare for the holiday season (i.e. keywords, optimization for your product copy) • Talk with your suppliers about their planned product lines and closeout inventory • Test now for titles, description, images • Streamline the ordering process. Don’t wait until your holiday shoppers arrive to make sure that your operational processes are in tip-top shape. You don’t want shoppers to experience any shipping delays due to non-payments or missed emails – especially at the holidays when quick delivery is a top buyer priority.
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That is a great question. Yes, we do get responses from suppliers saying that they won't work with eBay sellers. The main reason is because they have agreements with their manufacturers on where products can be sold. Some manufacturers will even specify what area's of town their products are allowed to be sold.
Another reason is that suppliers fear they will loose control of their product value because of their products being sold on an "auction" site. What you need to do in this case is ask your supplier what their MAP (Minimum advertised Price) is. The MAP is a price that you will agree not to allow the product to sell less for. This will reassure the supplier that their other buyers won't be undersold by large margins that accounts will be closed. So make sure to let your suppliers know that you will honor MAP.
Video games are like dvds. You may find liquidation suppliers or postal auctions who will have overstock or "like new" inventory that you could resell, but those will not be a renewable source. To source new video games, you may have to be licensed and you will have to be able to buy in super large volume. It is very difficult to find dropshippers who will deal with single item video games, because of the low profit margins.
There are many more tips that WorldwideBrands.com has learned over the years, working with thousands of wholesale suppliers and over 100,000 online retailers. To summarize, I’ve gone through the basic steps for starting and building a successful relationship with your wholesale supplier.
Any remaining questions from this workshop can be answered by reading our free material at www.WorldwideBrands.com, calling our toll-free Customer Service Line, or emailing our Customer Service Department. Our contact information is available on our site.
Our company, Worldwide Brands' full-time staff is dedicated to finding and qualifying the factory-authorized wholesale suppliers with whom online sellers can use all the various methods of product sourcing. We also publish all the results of our years of research in our members’ center. There is a free preview available if you’d like to explore what’s available within our wholesale supplier database.
Thank you very much for being here today, and thanks to eBay for providing this workshop so that we could talk, and help each other learn more about becoming successful eBay entrepreneurs!
Thanks for stopping by today and participating in the workshop.
This concludes the "Building Supplier Relationships is Very Important Especially for the Holiday Season" workshop. Be sure to check the Workshop Calendar for upcoming workshops.
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