The Ecwid Blog>The Science of Contacting Suppliers and Manufacturers When You're Starting a Business

The Science of Contacting Suppliers and Manufacturers When You're Starting a Business

Posted by Jesse Ness, Ecwid Team

Countless entrepreneurs keep their entrepreneurship dreams on hold because they’re unsure of how to deal with suppliers.

If you are just about to start your e-commerce business, you probably hesitate to approach suppliers too because you’re not sure if they’ll take you seriously.

In truth, suppliers are business owners like yourself. They want the same things as all businesses do: more sales, less risk, and reliable payments.

The risk appetite for suppliers depends on four things:

For new businesses, getting suppliers on board is simply a matter of reducing their exposure to risk. The easiest way to do this is by offering to pay upfront. Suppliers won’t care about the size or age of your business as long as they’re getting paid.

Besides upfront payments, you can also show your legitimacy by:

Below, we’ll show you how to deal with different suppliers based on your business model.

Related: Should You Make, Manufacture, Wholesale or Dropship Your Product?

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How to Approach Wholesale Suppliers

In the wholesale model, you buy products from a large supplier at low rates. You then sell them to customers at retail rates. Wholesalers might carry a single product-type (such as socks) or a range of products from different brands.

Since you are paying upfront for the product, the wholesaler’s risk is almost non-existent.

It doesn’t matter whether you have a great website or no website. As long as the seller gets paid, he’ll be happy to work with you.

In fact, a number of wholesalers even operate online stores. You can buy from these stores just as you would buy from Amazon.

This wholesale supplier sells on Ecwid Instant Site

The shopping process is the same as any e-commerce store. You can add the product to your cart, enter your shipping details and make the payment. At no point are you asked for your business details at all.

However, not every wholesaler operates the same way. Some operate a customer-facing website where you can order limited quantities (as low as 1 item) at retail prices. To get wholesale rates, you have to create a “wholesale” account. This often requires submitting your tax information.

At DyeMurex.com, you have to create a wholesale account to get wholesale prices. You can also buy smaller quantities, but you’ll have to pay retail prices for it.

DyeMurex, a t-shirt wholesaler, requires a US tax ID to access wholesale pricing

To create a wholesale account at Dyemurex, you need a US tax number. If you are outside the US, you have to have a valid website and/or social media presence. This requirement will vary from supplier to supplier and country to country. Consult your country’s local tax laws on how to get a tax number.

Not every wholesaler maintains websites where you can order products. And few wholesalers offer their best possible rates and sales terms through their websites. In such cases, you have to communicate with wholesalers directly and strike a deal. Here’s how to do it.

1. Find a sufficient number of wholesale suppliers

Step one is to find a number of target wholesalers. In the US, you can use websites like WholesaleCentral.com and TopTenWholesale.com to find wholesale suppliers. You can also use TSNN’s search to find trade shows and visit suppliers in person.

2. Filter the reliable ones

Before you spend any time communicating with wholesalers, evaluate whether they fit your requirements and standards:

Once you are fairly certain that you’re dealing with a reputable company, proceed to the next step.

3. Communicate your requirements

This is the part where most new entrepreneurs hesitate, especially if they don’t have a website or store.

The trick is to portray confidence. You don’t have to lie, but it doesn’t hurt to project an image of being slightly bigger than you are. Your objective is to get the best possible deal, after all.

This confidence is conveyed in the length, tone, and content of your communication. Be concise and exact in your messages. Make it clear that you know what you want.

This wholesale email template works because it is clear and professional

There are a few tactics you can use to make your emails more persuasive:

Once you have the information you need, you can negotiate for better terms such as Net-30 payments (i.e. payment for goods after 30 days of receipt) or lower prices for higher order volumes.

Wholesalers sometimes offer drop shipping services as well. We’ll show you how to deal with them in the next section.

How to Approach Dropship Suppliers

Dropshipping is when you act as the retail arm of a manufacturer or wholesaler. Instead of buying and stocking products yourself, you only sell the product to customers. Your drop shipping partner takes care of fulfilling the order, usually under your own brand name.

On paper, the higher involvement of drop shippers means higher requirements from retailers as well. In reality, the intense competition among drop shippers means that drop shippers have to fight hard to win over retailers.

This intense competition has led to the fragmentation of the market into two categories. This brings us to the first tip.

1. Understand who you’re dealing with

The options include drop shipping aggregators and wholesale drop shippers.

Dropshipping aggregators are websites that give you access to hundreds of drop shipping suppliers from a single platform. Examples include Syncee, Spocket, Sup Dropshipping, Doba, SaleHoo, etc. These aggregators usually charge an upfront fee to access the suppliers. They also offer plugins and APIs to easily import products into your store.

Here are a few things you must know about dealing with drop shipping aggregators:

Dropshipping aggregators are an easy way to start selling. However, use them only as a stop-gap approach. Once you have a proper store and a history of sales, it is better to approach individual drop shippers and get better deals.

Wholesale drop shippers are wholesalers who also offer drop shipping services to a select few retailers. A vast majority of drop shippers fall in this category. Usually, they cover a single product-type such as knives or sports gear.

To work with these drop shippers, you’ll have to create a wholesale account and provide your business information. You get access to the catalog only after the drop shipper approves your account.

Most small-time drop shippers do this to discourage one-time bargain hunters. Some drop shippers like MagnumTuning even mention this on their sign-up page:

MagnumTuning requires approval for each application to discourage discount shoppers

Many drop shippers will be happy to waive off approval requirements if you place a large initial order or send them deposit money. Having a seller’s permit or sales tax number is also helpful.

While the signup process is harder, you get much better rates than drop shipping aggregators.

In some industries such as t-shirt printing, drop shippers have easier requirements. For example, Printful gives free access to any retailer regardless of volume (and integrates with Ecwid.)

Product types you can drop ship with Ecwid and Printful

Once your business is ready, this is the right way to go if you want to drop ship. If you’re using Ecwid, you can use the WholesaleB2B app to make integration with drop shippers easier.

Also, check out more dropshipping services that can be integrated with your Ecwid store.

2. Ask the right questions

Here are a few questions you can add to the email template shown above if you contact a potential drop shipper:

Besides wholesalers and drop shippers, you can also source products from manufacturers.

How to Approach Manufacturers

Manufacturers are companies that can:

Manufacturers are different from wholesalers and drop shippers in that they have high order requirements and significantly lower prices. Since each order is made from scratch, most manufacturers require an upfront payment to cover the manufacturing cost.

The upfront payment means that most manufacturers are very flexible in who they work with. The nature of manufacturing is also such that it attracts a lot of entrepreneurs trying out new ideas who might not have websites or sales.

Consequently, most manufacturers are easy to work with as long as you meet their minimum order requirements.

Related: How To Find a Manufacturer for Your Product Idea

There are a few things you should keep in mind when approaching them.

1. Ask about minimum order quantity (MOQ) and deposit

Manufacturing costs go down as the volume increases. Consequently, MOQ is one of the most important metrics when dealing with manufacturers.

Ask about the manufacturer’s MOQ in the first email you send them. Don’t waste time dealing with a manufacturer who has higher MOQ than your requirements.

If you’re taking the Alibaba route, most manufacturers would list their MOQ on their profile itself.

Most manufacturers on AliBaba will show their MOQ on the product page itself

Some manufacturers might be wary of dealing with new businesses who are only interested in the minimum possible order volume. To get around this problem, ask for prices for a range of order volumes (say, MOQ to 50,000 units).

Also, ask what kind of upfront deposit will the manufacturer require to kick start production (and the refund process in case of a dispute).

Related: Checklist: How to Find the Right Supplier on AliExpress

2. Ask about manufacturing capacity, shipping, and packaging

The manufacturing capacity and shipping time are two important factors in choosing a manufacturing partner. Not asking about these might set off red flags for the manufacturer.

So in your email, ask about the following:

3. Ask for samples

No serious business will choose a manufacturer without asking for product samples.

Manufacturers expect this. In your email, make sure that you ask for a product sample. This will not only help you evaluate the manufacturer, but it will also show that you are serious about the business.

4. Ask more about the company and the factory

This includes:

If possible, ask for a Skype tour of the factory. Again, most legitimate manufacturers will be happy to provide this information.

Checklist: 20 Questions to Ask Your Manufacturer

Everything you need to know before calling it a great deal

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To Sum Up

Whether you are looking for a wholesale supplier, a dropship supplier or a manufacturer, remember to do the following:

 

About The Author
Jesse is the Marketing Manager at Ecwid and has been in e-commerce and internet marketing since 2006. He has experience with PPC, SEO, conversion optimization and loves to work with entrepreneurs to make their dreams a reality.

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