What is a supplier?

What-Is-A-Supplier-Avasam
When you’re starting out in eCommerce, there’s lots of things to take in. If you’re right at the beginning of your journey in eCommerce or DropShipping, it’s best to get a clear understanding. Let’s start with suppliers.
Supplier Summary

A supplier is a person or business providing products or a service to another business or to a customer.

Pretty simple, right? In a business, the role of the supplier is to provide the products from a manufacturer. The supplier can act as a ‘middle-man’ between the manufacturer and the seller, ensuring good communication and quality of stock. Suppliers can also act as a manufacturer, a processor, packager, a wholesaler or dealer, or as a retailer themselves.

Why is a supplier important?

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Suppliers are important to retailers because they are responsible for the quality and availability of the products. This is particularly important in DropShipping setups, because the seller never sees the product. The only way they know if their supplier isn’t doing a good job is when complaints arrive… Or worse, when complaints don’t arrive and when orders stop being placed because of poor reviews. Your business could slowly grind to a halt this way!

Not only are suppliers important to sellers, they’re also important to manufacturers. If the supplier isn’t doing their job well, the manufacturer might end up losing out too.

What is a supplier responsible for?

What-Is-A-Supplier-Responsible-For

In addition to importing, storing and dispatching items, suppliers are responsible for ensuring that laws and standards are adhered to. Suppliers should also ensure fair transactions between manufacturers and provide the best price possible. They should provide equal opportunities between sellers, and avoid doing business with anyone that presents a conflict of interest.

What’s the difference between supplier, distributor and manufacturer?

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We’ve covered what a supplier is, so let’s define the other two:

A distributor will dispatch items directly to businesses that sell to customers. They’re an intermediary between the manufacturers and customers. This setup is usually arranged when the supplier cannot deliver their products to customers themselves. A good example is the Fulfilled By Amazon arrangement – where Amazon holds the item for the supplier or the seller, and delivers it on behalf of them, but Amazon does not own them or pay for them.

The manufacturer is the one that produces the goods for sale. Depending on their setup, they can also be suppliers, and retailers. They might work with distributors, suppliers or sellers to get their products to the end customer.

How can I find a reliable supplier?

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As your business is so dependent on your suppliers, it’s crucial that you find the best suppliers for you. Although it’s incredibly important, tracking down a good supplierhas always been one of the biggest challenges to successful DropShipping. If you have to work with suppliers overseas, it can be even trickier.

Trying to find the right supplier for your business can be challenging, simply because of the internet! Google ‘DropShipping supplier’ and you’ll find hundreds – if not thousands – of middlemen and scam pages ready to take your money. We recommend finding and working with UK suppliers where possible that you can visit, or suppliers who are verified by a trusted company.

Although you’ll probably start by searching online, you can also find and meet reliable suppliers in person at trade shows. Major events in the UK include Spring Fair and Autumn Fair, and there are plenty of others to choose from. If you’re looking to attend a trade event, look at the exhibitors before you sign up. You should see plenty of well-known brands and suppliers that are going to be exhibiting. If you’re unsure, the quickest way to work out if they’re a good supplier by checking review websites like Trustpilot, or asking for references/recommendations.

How to spot a fake DropShipping supplier

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There’s thousands of pages online by scam artists who want to take your money. Unfortunately, lots of suppliers don’t have a huge online presence, or may have a pretty basic looking website. That means you’ve got to be really careful and do your research. Here’s a few tips to avoid dodgy ‘suppliers’ and losing money.

Ongoing fees

Real suppliers won’t charge you to do business with them. If the ‘supplier’ website you’re looking at wants you to pay a monthly fee, we’d advise you to use caution.

There’s a couple of exceptions to this rule. The first is supplier directories, or platforms providing a feed to different suppliers. You should be able to organise by category or type of supplier, and usually the suppliers are screened or verified. You don’t have to use these – many businesses are successful without them.

Secondly, some suppliers have a minimum order size. If you’re DropShipping, this can mean you’ll need to make some up-front payments so you have credit with them. Over time, as you build your credibility with them, they may charge you less and allow you a credit account arrangement. Per-order fees are standard too, so don’t worry if you see suppliers charging these.

They sell directly to the public too

If you’re selling from suppliers, you need wholesale prices, otherwise you simply won’t make money. You might make the odd sale here and there, but it’s unlikely. With reliable suppliers, you’ll need to prove you’re a genuine business and be approved before they’ll give you wholesale prices. If your potential supplier is offering items to the public at ‘wholesale prices’ – they’re just a retailer.

Unfortunately, it’s the nature of the internet but there are plenty of other scams that you might have to avoid. If there are no phone numbers on a website and you can’t get a response from them – avoid them. A great supplier has nothing to hide! Most are happy to provide you with contacts for companies they have been working with, so you can get a current reference before you start.

Can I use multiple suppliers?

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  • To reduce risk
  • To optimise performance
  • To minimise costs
  • To increase efficiency
  • To protect your brand

When you’re selling online, the success of your brand is in the hands of your suppliers. You’re relying on your supplier fulfilling your orders quickly, dispatching the right item efficiently. If they don’t, or you end up with disputes from customers you could end up seriously out of pocket!

If your supplier sells out of a popular item, you could be potentially losing sales. Of course, you don’t want that to happen. You can mitigate that by working with several suppliers – if one sells out, you can pass orders to another. Not only that, by working with several suppliers, you can see where additional costs might be being incurred. Also, if a supplier knows that you’re reliant on them, there’s a possibility you won’t receive the best service. They might be more likely to inflate their costs, or to assume they can provide slower delivery, for example. By having multiple suppliers, you have the choice to stop working with a supplier that isn’t performing.

Don’t worry about offending anyone either. Using several suppliers is a normal thing, although some may provide preferential rates if you work exclusively with them.

The easy way to find great suppliers

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Finding suppliers can be easy if you know where to look. Avasam allows sellers to vet and connect with suppliers and automates all the processes that you need for a successful DropShipping business. That means it’s easy to find reliable suppliers with the items that you want to sell – no more searching for reviews.

On Avasam you can simply choose the suppliers which ones have the products you want, of course. But we built in other features to help make it even easier to identify the right suppliers for you – even if you don’t know what you want to sell yet. You want your business to be a success, and so do we! That’s why we built in a rating and review system within Avasam – to save you time checking Trustpilot and so on. Current sellers provide ratings and feedback so you can be certain you’ve picked a good one.

We also set up the Avasam Verified Supplier Programme, to highlight the best of the best of Avasam’s suppliers. Currently there are two awards for suppliers who meet the criteria: Avasam Verified Supplier, and Avasam Verified Platinum Supplier.

Verified Suppliers are experts in their field, with significant resources and knowledge to back them up. They have successful, efficient teams, and will help support your business by meeting targets and dispatching orders quickly.

Verified Platinum Suppliers are exemplary; they meet all the criteria for Verified Supplier status, but offer that bit extra. They’re the best, and offer stellar service – delivering 99% of orders on time, with less than 1% of orders disputed. They’ll almost certainly bolster your business with their strengths.

Don’t think that suppliers who don’t meet our strict criteria aren’t worth doing business with though. If they’re listing their products on Avasam, they are definitely worthy of your business! Those who haven’t been awarded any Avasam Verified Supplier status yet are likely to be working towards achieving it, and we’re supporting them as they do.

We’re also developing the Avasam Verified Supplier Programme further, and we’ll announce these developments as they happen.

How to create a good relationship with your supplier

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Here’s a few tips about creating, and maintaining a good relationship with your supplier:

  • Meet face-to-face. This might not be possible if your supplier is overseas, but UK suppliers are usually happy to meet you, and some international suppliers will be ‘in town’ once or twice a year for trade shows. If you know they’re going to be at a trade event, and it’s nearby, pop along and say hello.
  • Ask about their future plans. If they’re about to scale up their business, how might that affect you? Can you get exclusivity on a new line or product?
  • Talk to the people who manage your account. If you speak to the same person each time you contact a company, try and build rapport with them. If you have a good relationship with the person who picks up the phone, if something goes wrong, they’re more likely to want to help you get it sorted.
  • Make prompt payments. Not paying on time is the fastest way to lose favour with good suppliers. That’s especially true if they’re providing you with a credit account, so don’t risk it. Suppliers talk, and you don’t want your name mentioned as being difficult or unreliable.
  • Recommend them and pass opportunities to them. If your supplier is outstanding, help them to do more and they are likely to reciprocate. Avasam users canprovide feedback in the review facility, and you can head to Trustpilot to show your appreciation!

If you’re ready to stop searching and find a reliable supplier, you can! You can use Avasam for free until you’re processing more than 10 orders per month. This means you can give our suppliers a trial run with absolutely no risk. We’re sure you’ll be delighted with the service they provide, and just how easy selling on multiple marketplaces can be. Head to our sign up page to sign up for free – there’s no credit card required.

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Dawn Matthews

Dawn has worked in technical and customer supporting roles for over 20 years. Most of her career was spent in technical services at top rated UK universities, which has given her a keen eye for detail. A lucky escape led her to the field of eCommerce in 2017, and she’s never looked back.

Dawn studied in the field of social sciences with the Open University, achieving an MSc in Forensic Psychology at the same time as working two jobs. She regularly applies principles of psychology from her studies to her work, and outside of her role at Avasam she is busy writing her first book.

Follow Dawn on LinkedIn at www.linkedin.com/in/dawn-matthews

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