Developing a good relationship with your supplier isn’t complicated...
As long as you communicate clearly, tell them your needs and standards, treat them fairly, and pay them on time, it’ll be smooth sailing.
Sounds easy, right?
Well… not so much.
That is, unless you’re willing to put in the work.
Today, we’re going to talk about the benefits of having a reliable supplier, how to build (and keep) a good relationship with your supplier, and much more!
Let’s get right to it!
Before we say anything else, we’d like to remind you...
You need good (and reliable) suppliers.
When you find them, treat them like gold.
Suppliers are essential to your business's growth. Especially dropship suppliers, because they’re the ones in charge of shipping and handling your products.
Not to mention, you might get some pretty snazzy deals if you and your supplier are close. Such as:
Have you ever gotten so excited to receive an item that you purchased online only to realize the item is complete… crap? Yeah, I have too. It’s a terrible feeling!
Because your dropship supplier will be handling and shipping the products you want (and your customers’ orders), it’s so important to make sure they send high-quality items out.
While I’m not saying you have to be best friends with your supplier in order to get better products, think of it this way:
Would you rather give your best products to your friends or to your acquaintances?
I think you know the answer.
While you shouldn’t have to jump through hoops to have a good relationship with your supplier, you’re going to need to work hard at first to get a solid foundation of trust and, more importantly, support.
Think of your supplier as your business partner. After all, without them your business would be a total flop!
Here’s a prime example of what the support system should look like for you and your supplier:
Let’s say you share a potential strategy that’ll increase the volume of your sales. A supportive supplier would look over what needs to be done (on both their end and yours) to figure out how to meet this demand.
Suppliers are some of your greatest advocates. As long as you’re respectful of their needs, they’ll be respectful of yours.
There are so many ways to maintain a steady, prosperous relationship with your supplier…
If you’re willing to work for it.
Let’s dive into the top 7 ways to keep your suppliers (and yourself!) happy.
This goes without saying, but… pay your bills on time.
Just like you, your supplier needs to make money in order to keep their business up and running.
In order to be seen as a responsible business partner, avoid delaying payments at all costs.
However, things happen. If there’s ever a time when you think you’ll need to delay paying your supplier, be sure to let them know.
Make it a point to reach out to your supplier at least once per week. Talk about which of your products are selling well, how your business is doing, and how satisfied you are working with them. A little appreciation goes a long way.
This isn’t too difficult. Answer their emails promptly. If they call and you miss it, call them back as soon as possible. Don’t leave them hanging! Don’t agree upon purchasing a batch of products, then suddenly change your mind.
You know how some people are warm and friendly in real life, but always sound curt and hostile via text? Make sure you’re not that guy.
It’s the small things that add up. Instead of launching straight into “I’m placing an order for X more units of product JZ800”, take an extra second to say “Hey, hope you’re doing well!”
If you need a special favor, preface whatever you’re going to say with “I hate to bother you, but I was wondering if…”
You’d be surprised at how accommodating your suppliers (and their reps) will become when you make the effort to be friendly.
No one likes to be rushed - your supplier included.
Our advice when it comes to last-minute orders? Avoid them at all costs.
These cause stress both on your end and your supplier’s end; if you constantly make your supplier scramble to fulfill your orders, you’ll definitely damage the relationship.
Plus, what happens if your supplier tries their best, but still isn’t able to get the products out? They might try and cut corners to avoid disappointing you, which will lead to more complications down the road.
Tell your supplier about changes in key personnel, new products you may want to try, special promotions you’d like to do, and so on.
Just keep them up to date on what’s going on and share any ideas you have. You never know - they might have some great ideas of their own.
Do not leave your supplier in the dark when something goes wrong.
Let’s say your customer receives a defective product, leaves a crappy review on your website, and demands a refund.
Instead of simply dealing with the problem by yourself,reach out to your supplier to bridge the gap.
Figure out what went wrong and discuss how you can prevent this from happening in the future.
Even if the conversation gets a little heated, it’s good to talk things through… don’t just ignore the situation, because your supplier can’t fix a problem that they don’t know about.
Now that you know how to build relationships with your suppliers and keep them happy, let’s talk about your day-to-day operations.
In this section, you’ll learn all about managing and coordinating suppliers.
If you’re new to the world of dropshipping, you might be tempted to stick with a single supplier.
After all, this makes life much easier for you… you get to reduce administrative costs, you can keep your ordering systems streamlined, and you only need to build and maintain a relationship with one guy.
But here’s the thing: if you’re choosing to work with only one supplier, you’re putting all your eggs in one basket. That’s risky business.
What happens if your supplier decides it’s time to retire and shut down the company? Or if their warehouse is hit by a natural disaster? Or if they go bust?
To put it bluntly: you’re screwed.
Bearing this in mind, only you can answer the question on whether it’s better to work with a single supplier or multiple suppliers.
If you’re a one-man-show whose priority is to become profitable, you might decide that streamlining your operations is more important than minimizing risk.
In that case, go with a single supplier.
If you’re a growing brand who wants to establish yourself as a credible, trustworthy company, then you’ll want to try and eliminate stockouts and supply disruptions.
In that case, work with multiple suppliers.
Let’s look on the glass-half-full side first.
When you work with multiple suppliers, you won’t be hit as hard by supply disruptions.
If Supplier A is completely out of a certain product, you can still knock on the doors of Supplier B and Supplier C.
Plus, since your suppliers know that you’re not working with them exclusively, this keeps them on their toes. After all, they know you can easily stop working with them, and take your business somewhere else.
Now let’s look at the not-so-ideal side:
When you’re working with multiple suppliers, you need to put more time and energy into negotiating contracts and managing processes.
Like I said earlier, if you’re a one-man-show, this might be too overwhelming for you to take on (at first).
On top of that, because you’re splitting your orders between several suppliers, this means you have less bargaining power.
If your supplier sees you as a valuable client and wants to “poach” you from the competition, then, yes - they might still give you a good price.
If not, then you’ll just have to pay the higher prices associated with lower order quantities.
If you don’t have the proper systems and processes in place, coordinating multiple suppliers can be a logistical nightmare.
Ensuring your suppliers have enough stock is pretty simple: just use a third-party app or platform and get your dropshippers to sync their inventory to your online store.
This way, items which are out of stock can automatically be hidden on your website.
On top of that, you’ll also need to have clarity on which orders have already been fulfilled, and which orders are currently pending.
It’s simply not feasible to reach out to your supplier as and when your customers contact you about a late or missing parcel...
...but here’s what you can do: use a cloud-based inventory platform which lets you keep track of where your customers’ parcels are.
Invite your dropshippers to your account, and use the system to keep track of order statuses. Once your dropshipper marks an order as “fulfilled”, you’ll be able to view the tracking information.
If a customer reaches out and asks about their parcel, you can pull up the information and get back to them in a matter of seconds.
Let’s say your customer orders 5 items on your eCommerce store - 3 stocked by supplier A and 2 stocked by supplier B.
How do you ensure that all the products are sent to your customer at the same time?
Unfortunately, unless you’re planning to pay for a third-party logistics (3PL) company, there’s no way around this.
Let me break it down for you:
If you’re in this for the long haul, and you want to build a brand, hiring a 3PL company might be a good choice.
You can get a company such as Shipwire Order Fulfillment to consolidate your orders, pack them nicely, and then ship them to your customer. This gives you more control over packaging and delivery.
If your finances don’t allow for this, then your customers will have to deal with getting their items sent to them separately.
Be sure to give them a heads-up (either in your Thank You page or your purchase confirmation email) to let them know that their items may not reach them at the same time, though!
Want your shipping to be as smooth-sailing as possible? Keep these next best practices in mind.
Again, the best way to do this is with an inventory management platform.
If that’s not possible, get your supplier to confirm that they’ve received your order (regardless of whether it’s via an acknowledgment slip or a casual email reply).
Some business owners will try and shave a day or two off the supplier’s lead time.
If your supplier states that it takes 5-8 days for an item to reach a customer, you can expect the item to get there in 5-8 days, NOT sooner.
Honesty is the best policy, y’all.
If you know a certain product takes 5-8 days to ship, communicate this to your customers upfront.
Also: don’t give your customers the option of Express Delivery, or Next Day Delivery, if you know your supplier won’t be able to get the item to them on time.
- Mention realistic delivery time in your product description.
- Reiterate it again at the checkout.
- Mention it in your Frequently Asked Questions (FAQ) section.
- Provide a time frame before customer should contact you (Example: Delivery can take up to 5 weeks, contact us if you don’t receive the package yet).
- Use a UCaaS platform to combine multiple communication channels into one interface, preventing miscommunication.
- Offer free shipping. Your customers will find it more acceptable as a result.
Assuming your supplier is sending their items via ePacket, tracking is pretty simple.
Again, if you’re dropshipping items via ePacket, you don’t need to worry about customs. All duties are already paid, so you’re good to go.
But what if you’re shipping items via a private mail carrier such as DHL? In order to minimize delivery time, DHL will pay the import duties and taxes on your behalf (and later request for reimbursement).
These duties and taxes are typically charged to the receiver (ie your customer) - but you can opt for “Delivered Duty Paid”, and get DHL to charge the fees to you instead.
Let’s say a customer wants to return a product. Now what?
You can request an RMA (return merchandise authorization) number from your supplier, and get your customer to send the item back to your supplier.
From there, your supplier will either refund you (so you can refund your customer), or send your customer a new item in return.
Bear in mind that not all suppliers accept returns. Assuming your supplier is willing to do this it will result in a crazy long wait time for your customer.
Obviously, this method of dealing with things might lead to some pretty unhappy customers. This brings us to your second option…
Purchase a new item from your supplier (out of your own pocket), and have them send the item to your customer.
In this case, your customer will get a new product without even having to return their existing one.
This is obviously the more expensive solution, but you can bet that your mollified customers will now be recommending you to all their friends.
The last piece of the puzzle is making sure your order fulfilment process works like a well-oiled machine.
Here’s how you do that!
Communication is key.
If you’re placing a larger than normal order, if you’re changing your regular order, be sure to keep your supplier in the loop.
At the same time, ask them to keep you updated whenever they expect delays in fulfilment or a significant change in their inventory levels.
It’s highly unlikely that your supplier will get everything right from the get-go. But by monitoring their performance and providing them with feedback, you can iron out the challenges you’re facing.
In particular, keep an eye on delivery time and product quality!
Late deliveries typically boil down to one of two things: either your supplier is late because their supplier is late, or they had a production issue.
Let’s look at the first scenario: say your supplier is late because their suppliers were late. If it happens just once, give them the benefit of the doubt, and let it slide.
But if the same issue comes up again and again, ask them to hold safety stocks (and reference this in a clause in your supply agreement).
What if your supplier had a production issue? If they weren’t able to produce your items because they didn’t have enough capacity, consider placing blanket orders moving forward.
Assuming you can forecast the demand for your products, placing an order for, say, six month’s worth of supply will mean that your supplier has to reserve capacity ahead of time.
If your supplier had a production issue involving equipment failure (and this becomes a recurring problem), again, get your supplier to hold safety stocks for you. Build it into your contract, so that it’s water-tight.
People tend to see dropshipping as the “holy grail” of eCommerce…
...they don’t realize that it comes with its own set of unique challenges.
Here’s the bad news:
Contrary to what many online articles might preach, dropshipping isn’t a lifehack, and you need to put in a ton of effort to make a dropshipping business work.
But on the bright side:
You now know how to manage your dropship suppliers, and deal with shipping/delivery/return problems.
So get out there, and start dropshipping!
If you liked this article, please share it with your entrepreneurial friends!