06 Mar 7 tips to successfully manage your vendor/supplier relationships
2018 is poised to be another year full of opportunities for eCommerce sellers looking to start or grow their wholesale business. Increased opportunities are always great; however, they bring additional competition into the market, which forces sellers to create unique ways to stand out. When you couple this with the changing environments throughout the various eCommerce platforms, sellers must understand how they can effectively manage their supplier relationships.
Here are 7 ideas that Eddie Levine of Wholesale Breakthrough recommends you consider:
- Structure your business correctly. Before you go out and approach your vendors, you should understand that most of them are going to require their customers to provide them with the same basic types of information. These things can include a Federal Tax ID (FEIN), a state resale certificate, banking / financial information, trade references, and a company website. I recommend you create a standard credit reference sheet which has all this information listed in a clear, easy to follow format. Keep this document handy and update it as needed, or at least semi-annually.
- Be a value-added partner. The days of obtaining price lists from vendors and finding products that you can merely list online to sell for a profit are fading quickly as more and more vendors tighten their grip on this distribution model. Anyone can sell a product online, but the value you bring to your vendors should be what sets you apart from the rest. Before asking if you can sell a certain line, consider having a discussion with your supplier to better understand their business, their pain points, and what areas that they, as a brand, need help with. Then, decide if what they are looking for is something that you, as a partner, can help them achieve. Hint: It’s ok to say tell a vendor that you are not the best partner sometimes. The worst thing you can do is promise something that you don’t know how to or cannot deliver. Be honest from the start, your vendors will respect you for it.
- Meet face to face. I’m amazed at how many people still resort to hiding behind a computer screen and a telephone. If I asked you “Are you willing to pay $300 to secure a commitment from a brand to allow you to sell their product online, would you pay it?” The answer most likely is absolutely. Be willing to jump on an airplane and meet with a brand owner face to face or at a trade show to discuss how you can help them. Be the person who goes the extra mile to show a vendor that you are truly committed to their success. Be more than a business card in their back pocket. If you truly cannot meet in person, instead of hosting conference calls, use something like Zoom for example, because it gives you the opportunity to physically see who you’re talking to and allows you to make a strong impression.
- Always under promise and over deliver. When you talk with brands about their needs, make sure that you are setting up realistic goals and expectations for both yourself and the brand you are working with. Oftentimes you only will get one shot to prove your value and experience, so rather than cater to every want and need of a vendor, identify a few key actionable items or areas that you can truly excel at. Take those few areas, knock them out of the park, and go over the top. It’s always best to do more vs falling short.
- Understand the power of no. One of my mentors in a previous sales job of mine once told me that the word no is the most powerful word in the English dictionary. She was so right. As partners looking to secure opportunities and deals, we oftentimes find ourselves saying yes to everything. This is setting yourself up for a guaranteed failure. If a supplier asks you if you have a capability of doing something that you truly know you cannot achieve, say no! It all goes back to being honest and never overpromising your capabilities. The same thing goes for when you negotiate pricing. We are all business owners that need to make money. If an opportunity is not going to generate enough margin based on the time commitments it will require of you, don’t be afraid to push back with your reasoning. Keep calm and professional of course, but everyone deserves to have their voice and concerns heard. Not every deal will work, and that’s OK.
- Communication is key. When I think about communication, I think about the definition of a relationship. To me, I define a relationship as a two-way street built on the foundation of trust and respect. When working with your vendors, make sure that both sides understand what their roles and responsibilities are. Only then can you take a relationship from a discussion and grow it into a long-term partnership. You must be able to trust the vendors you are working with and vice versa. Respect what each of you bring to the table and leverage those qualities to propel both of your businesses to the next level.
- Ask for referrals. Even though there are an endless number of companies that you could approach to do business with, we still live in a very small world. If you are a seller who operates in one or a few specific categories, the chances are high that brand owners in your respective areas know each other. Key contacts shift around to different companies all the time, but it’s very common they remain in the same industry. Someone may change jobs, but they aren’t losing their network. In fact, they are likely adding to it. When you have success with a partner of yours, or you know they are happy with the work you are doing for them, don’t be afraid to ask them to introduce you to other people they may know. This is also why you want to be very honest with your business and your intentions from the start. While great work oftentimes gets rewarded with things like referrals, deceptive practices or poor follow through can damage your reputation faster than you could ever imagine.