As an eCommerce seller, you’re only as good as your products. And your products are only as good as your suppliers. So, it’s safe to say that finding quality suppliers that you can rely on is critical to your success.
But how do you go about identifying the best manufacturers and wholesalers to work with? We decided to ask Deepak, an experienced Amazon seller, to share his insights with us.
In this guide, we’ll provide you with all the information you need to choose the right suppliers for your business. We’ll also share some stories about what can happen if you work with the wrong companies.
Deepak was born and raised in India, but he currently lives in Japan. While he works as a freelance animator he’s always had an interest in eCommerce.
In 2017 he started selling on Amazon, first in the Electronics category and later in Home & Kitchen. However, he didn’t find success right away. He watched YouTube videos to learn the basics, and while this was enough to get him started it didn’t provide the information he needed to be truly successful.
As a result, Deepak had a few missteps along the way. But through trial and error, he eventually developed a solid eCommerce strategy. Today, he sold about $900k Private Label products and teaches beginners how to sell on Amazon through his own YouTube channel.
How a Poor Shipping Plan Caused Deepak to Pay More Than He Had To
Early on, Deepak experienced a few problems that cost him money. The first was that he wasn’t aware he could have the supplier send his inventory directly to Fulfillment by Amazon (FBA). Instead, he had his items sent to him and then he forwarded them to Amazon. This meant he was doubling his shipping costs.
While part of the problem was that Deepak was new, the main issue here was the supplier. Quality manufacturers have experience shipping to Amazon and they would have let him know this could save him money.
How to Avoid Shipping Issues
To make sure you don’t pay more for shipping than you have to, inquire about a supplier’s shipping methods and costs.
Here are some questions to ask them:
- What shipping methods do you use? You want to know whether they ship by air or sea and which carriers they use. You should also talk to them about shipping directly to Amazon.
- How quickly are you able to fill my orders? It’s important to know how long it will take to receive your items from the time you order them. If they’re not able to meet your deadlines you might need to look elsewhere.
- Can you give me a quote? Shipping costs are a big part of your expenses, so make sure you get a quote before you actually place an order. That way you can compare shipping prices between suppliers and get the best rate.
Don’t make the mistake of just focusing on the products. By finding a supplier who has an effective shipping strategy you’ll make your life a lot easier.
How Quality Issues Cost Deepak Time and Money
The other big issue Deepak had was the quality of his packaging. After sending his inventory to Amazon he was informed that the bar codes on his products weren’t properly attached. As a result, Amazon was unable to scan them and they wouldn’t accept his items. He was forced to take the products back to fix the problem, which cost him $400.
This is another problem that could have been avoided if Deepak had used a more experienced supplier. They would have quality control procedures in place to catch these things. They’d also likely have experience shipping to Amazon and would know the requirements.
How to Avoid Quality Issues
When you’re interviewing manufacturers and wholesalers you’ll also want to question them about the quality of their goods and packaging.
Here are some questions to ask them:
- What kind of quality control procedures do you have in place? A good supplier will have systems to ensure that all the products they produce meet a certain standard. If a company is unable to come up with a solid answer to this question it’s probably a bad sign.
- Do you have a guarantee policy? Most suppliers will have some sort of guarantee in place to protect you against faulty products, packaging errors, etc. Make sure to clarify what exactly the guarantee covers.
- What happens if my products are faulty? Is there a refund policy? A guarantee is all well and good, but what actually happens if something goes wrong? You need to understand this before you purchase anything from a supplier.
- Who pays for replacement products and the shipping that’s involved? You’ll want to ensure you don’t actually have to pay any additional money if the supplier makes a mistake.
- Do you have experience shipping to Amazon? This is an important one if you’re planning to sell through Amazon FBA. There are a lot of procedures you need to follow when shipping to FBA. If the supplier has experience with this they’ll understand the type of packaging, labeling, and quality control that’s required in order for Amazon to accept your products.
One more thing to consider when it comes to quality is the supplier’s online reputation. Do they have any reviews or testimonials? For example, if you’re looking for suppliers on Alibaba they have a rating system to help you judge how reputable a company is.
Check out various ratings and read some reviews to see what other entrepreneurs have to say about certain suppliers.
According to Deepak, the quality of your items is critical to your success, especially in Japan.
“People will complain over the smallest defect, so you need to ensure you have high-quality items by thoroughly researching and vetting suppliers,“ he says.
That’s why the above questions are so important.
Finding the Right Supplier for Your Business
While Deepak learned some valuable lessons, they came at a high price. So, it’s best to learn from his mistakes.
Follow the steps below to properly vet suppliers and find the best one for your eCommerce business.
- Create a Shortlist of Suppliers
Once you decide what you want to sell it’s time to start searching for a supplier you can purchase it from. There will likely be hundreds to choose from, so here are some criteria to narrow your search:
- Do they sell the item you’re looking for?
- What price are they offering? Does it fit with your budget and how does it compare to their competitors?
- What’s their minimum order quantity?
- Do they have a high online rating/positive reviews?
To make the process easier many product research tools offer features that allow you to sort suppliers based on these criteria. For example, AMZScout’s PRO Extension lets you see all the available suppliers on Alibaba for any given product. From there you can filter them by price, minimum order quantity, and rating.
Based on this, reach out to the top three or four suppliers to learn more about them.
2. Get Samples
It’s hard to judge the quality of a company’s product without seeing them in person, so the next step is to ask each of your shortlisted suppliers for a sample. This gives you a chance to experience the quality of their goods for yourself and decide whether it lives up to your expectations.
Any upstanding supplier will be happy to send you a sample. The sample is usually free but they’ll likely ask you to pay for the shipping.
Try the products out, use them for yourself, and compare them against one another. Based on this, decide which company has the best quality items.
3. Research the Supplier
Before doing business with any supplier you’ll want to ask them all the questions listed above. In addition, you should also do your own research. Companies are always going to talk highly of themselves and their products, so you might need to do a little extra digging to determine whether they’re actually telling the truth.
Here are a few steps you can take to ensure you’re dealing with a legitimate business:
- Audit Their Factory: In a perfect world you’d tour the supplier’s factory in person. However, this isn’t always feasible. Luckily, you can hire a quality control firm to do this for you. They’ll inspect the premises and let you know if there’s anything suspicious. Tell the supplier you plan to do this. If they’re a quality company they shouldn’t have any issue with it.
- Search Court Databases: You’ll want to know if the supplier has had any legal troubles. This could be contract disputes, being forced to pay damages, or any number of other infractions. If you’re dealing with Chinese companies you can find this information through the China Trial Process Information Disclosure Website or China Judgments Online.
- Agree on a Method of Payment: Reputable businesses will only accept safe and verified forms of payment. These include TT, Western Union, MoneyGram, Alipay, and PayPal. If you really want to test a supplier, tell them that you’ll have a local agent pay them in cash. A good supplier will never agree to this.
- Do a Google Search: If a supplier has a bad reputation you’ll probably be able to find information about them online. Enter the company name into Google and add words like “fraud” or “scam” to see if anything comes up.
- Phone Them: Upstanding companies will have a landline that’s clearly stated on their website or Alibaba profile. If you can’t find a phone number, or they won’t give you one, be suspicious. If you do get a number, call it to see if anyone picks up. Most fraudsters use mobile phones, so look for numbers that start with +86 (this is what any standard Chinese landline number should start with).
If a supplier passes all of these tests they’re almost certainly a reputable business and you should feel comfortable working with them.
4. Get a Quote
The final step is to ask the supplier for a quote. This should include the cost of both the items and the shipping.
It’s a good idea to get quotes from a few different suppliers so you can compare them. This ensures you’re getting a fair deal. It also gives you leverage if the supplier you really want to use quotes a little high. You can show them a competing offer and see if they’ll match it.
Most manufacturers and suppliers are willing to negotiate, especially on bigger orders. So, never accept the first quote you receive. Provide a counteroffer to make sure you’re getting the best price possible.
Conclusion & Additional Tips
Finding a supplier is a long process, but it’s important to take all the necessary steps to do it right. By following the advice above, you should find a dependable company that you can partner with for many years.
Before we leave you, here are a few more tips Deepak has for starting an eCommerce business:
- Finding a great supplier doesn’t matter if you don’t have the right product. Use product research tools like AMZScout to identify profitable items.
- Drive more traffic to your listings by using Amazon Ads. This is much more effective than using social media platforms like Facebook and Instagram.
- Use Google and YouTube to find educational resources about selling on Amazon. The more you educate yourself the better.
With the right information, and enough determination, there’s nothing stopping you from creating your own eCommerce success story.