Wholesale Supplier Relationships - 9 Keys to Success

As you run your business, you will begin to notice differences in wholesalers. Over time, your success will lead to new opportunities to improve your supplier relationship. What are some of the qualities of the best suppliers?


We will discuss advanced wholesaler supplier issues in this “Wholesaler Guide 104: Remember the 9 Keys to Success.” These issues will include differences in supplier types, improved payment terms and synchronization between your store and the distributor.


We shall also address how having multiple suppliers can help you succeed with Scalability, Selection, Stocking and Supply. The best supplier relationship will provide you with the flexibility to deal with new challenges. Working with the right suppliers can help you create the most efficient supply chain process - lowering your costs and increasing your profits.



Types of Wholesalers


When you first start out, you might simply want a wholesaler carrying your product line. As you become more experienced, you will notice that there are different types of wholesalers. Finding the best wholesaler can lower your per unit costs and increase your supplier synchronization.


Usually, people will use a number of terms interchangeably, such as wholesaler, supplier, distributor, importer or liquidator; but, there are slight differences. We will discuss a few of these.


Fining Wholesale Suppliers

Exclusive Distributor


Some manufacturers prefer to set up exclusive relationships with wholesale distributors, an "Exclusive Distributor" might have the sole right to import and distribute merchandise within a country. This can be a good way to prevent counterfeits.


“Regional Distributors” might take large boxcar or container lots and sell them in trucks to local wholesalers.


“Liquidators” are usually selling heavily discounted goods for those who have “gone out of business.”


Jobbers or "wagon peddlers" make deliveries to local retail brick-and-mortar stores.


Another important wholesaler factor is size. The larger suppliers are likely to have lower per unit prices, due to their bulk purchases. You will need to be able to satisfy the larger wholesaler's Minimum Order Quantity (MOQ) to earn the lower wholesale discount.



9 Keys to Business Success


When you first start running your eCommerce store, you will have plenty of time and energy to deal with problems yourself. Gradually, you will need to add employees, whom you can delegate these tasks to. Thereafter, a store owner might be able to focus on setting the standards, strategy and overall direction of the company.


“We’ve had three big ideas at Amazon that we’ve stuck with for 18 years, and they’re the reason we’re successful: Put the customer first. Invent. And be patient.” - Amazon CEO Jeff Bezos.


The best suppliers can make your job easier. Once you have your business running, you can re-evaluate suppliers to determine which can help take your brand to the next level. Remember, the "9 Keys to Business Success":


  • Sale
  • Satisfaction
  • Saving
  • Scalability
  • Selection
  • Stocking
  • Supply
  • Support
  • Synchronization


By mastering these elements, you can raise your brand reputation above the competition.


Sale Timing


Sales can be a great way to move old merchandise quickly to clear your shelves for new models. Too many sales can cannibalize your normal price structure.


Customer Satisfaction


The World Wide Web and Social Media have given customers the tools to express their opinions immediately. Online reviews can make or break a brand. Effective eCommerce stores learn how to generate positive “word of mouth.”


“If you don’t understand the details of your business you are going to fail.” - Amazon CEO Jeff Bezos.


The World Wide Web has spoiled many customers. They expect all websites to know what they want, before they say a word. For some businesses, Customer Relationship Management (CRM) software has become a must-have.


CRM software allows you to track customer purchases, so you can upsell to them during their next visit. You can also create loyalty rewards programs with this software. By placing all of a customer's data at your employee's fingertips, CRM can help you satisfy the high customer demands of the Digital Age.


Saving via Net Terms


At first, you might have the worst payment terms for your suppliers. You have no track record or credit history with the supplier. They don’t know if they can trust you.


Gradually, your supplier will gain more trust in your reliability and credibility. Eventually, they are likely to relax their rules to offer you the standard payment practice of “Net Terms” – pay in 30, 60 or 90 days. And, it only makes good business sense.


“Trust is built up over time.”


Oftentimes, the business supply chain will lead to delays in receiving cash payments. You must set up your store by spending money before you even ring up one sale. Net Terms give you more control over your cash flow.


You can see the same mind set in the banking industry and your credit score. Longevity is a sign of reliability. Furthermore, after years of doing business together, both have made significant profits, so they can justify special treatment. Therefore, there is an incentive to developing a solid, long-term relationship with a good supplier.




How will you grow your business? Will you purchase more websites? How can your supplier relationships provide you with future expansion flexibility?


Internet searches are based on keywords; therefore, some entrepreneurs will have multiple websites with each one emphasizing one particular key word. For example, a realtor might have 3 x websites: "Melbourne.AU", "LuxuryCondos.AU" and "Property.AU" - these attract different customer niches.


“You should learn from your competitor, but never copy. Copy and you die.” - Alibaba CEO Jack Ma.


Future expansion requires forethought and planning. When you have multiple suppliers, you can see how different merchandise is priced. You gain perspective and options with multiple suppliers.




Suppliers must have the product selection that you need. But, styles change and you might want to expand your product line to attract new customers. You will need to peruse your supplier's product catalog to determine if they have the merchandise that can help your brand grow.




Certain suppliers might provide more useful up-to-date product descriptions. Accurate product literature can help your customers understand how to operate complicated merchandise. 


Supply Redundancy


Multiple suppliers give you options. It pays to have a backup plan. You cannot predict the future and working with multiple suppliers optimizes your selection, redundancy and perspective. Dont be afraid to try to source a few dropshipping suppliers.


Generic Sourcing


As you delve more deeply into supplier product catalogs, you might identify certain generic accessories that can be substituted for one another. Find one generic item from each supplier. This allows you to have a backup plan.


Sometimes, very popular merchandise will have certain accessories that are hard to find or out-of-stock regularly. With multiple suppliers, you can ensure that you always have a generic accessory, in stock. Create a generic product description, so both of the models satisfy the stated specifications.


Avoid Supply Disruption


Imagine having 75% of your eCommerce sales in one particular product and suddenly your supplier goes out of business. What would that do to your business? You might follow your supplier very soon, thereafter.


“A brand for a company is like a reputation for a person. You earn reputation by trying to do hard things well.” – Amazon CEO Jeff Bezos.


There are many ways that your product supply could be disrupted - dock strike, weather disaster or some political controversy. Even a large price increase could destroy your profit margins. Any of these could ruin businesses, which only have one supplier. Wise companies have a backup plan.


Find multiple suppliers with overlapping inventories to protect your business. If you need to order 8,000 units, then order 4,000 units from one supplier and 4,000 units from another supplier. This ensures that your store is always well-stocked. With multiple suppliers, you always have a safety net against disaster.


Handling Bad Wholesale Suppliers


How do you know if your supplier is inferior? Having multiple suppliers provides you with perspective on wholesaler standards. You can see the right and wrong ways of conducting business.


If you have any misgivings about a supplier, then prepare your brand ahead of time for a possible change. Establish a new relationship with another supplier that has an overlapping product line. Then, when you are ready to “cut ties,” you won’t have any supply disruptions.


Support for Retailers


Problems will arise from time to time with supply and you might need to contact a supplier customer service representative to get it resolved. These customer support issues might include tracking, invoices and shipping. Try to get the wholesaler to assign you one specific customer contact, so you don’t have to re-explain your problems every time you call.


Superior support for their retailers might be enough of a reason to choose one supplier over another. It feels good when suppliers resolve your problems quickly.




Another advanced supplier topic is technology. Unfortunately, most warehouses might have great logistics technology, but lack other cutting-edge tech innovations. You might want to work with a supplier that has the most advanced fulfillment technology.


“The very important thing you should have is patience,” - Alibaba CEO Jack Ma.


A comprehensive up-to-date online catalog, rich product descriptions, real-time order fulfillment, customizable data feeds and an online searchable order history could make your ordering process much easier. The most modern suppliers will allow you to order through emails or by phone.


Supplying Store Success


If you optimize each of the 9 Keys to Business Success, you will create a great foundation for your business. Your supply line will be uninterrupted and you can provide the most popular merchandise at the lowest prices. Build a great business reputation.