Whether you sell on Amazon FBA or Dropship on your own online store, picking the right supplier is crucial. Here are 5 tips to gear you towards choosing the perfect one.
Watch the video below:
Whilst working with Chinese suppliers can save you heaps of money, it can also make you lose some. If you don’t pick the right supplier, the consequences can really be damaging:
- You can get overcharged by a supplier , and lose out on the real profits you should be making.
- You could purchase poorly manufactured items, and won’t even know till an unhappy customer returns it back, and leaves a slimy review.
- You could get sued. Probably the worst one out of them all. The sad thing is, it’s really easy to expose yourself to this situation, without even knowing it.
While it’s true that a single supplier could make or break your business in a single day, there are many awesome ones to work with. Best of all? Finding them isn’t that hard.
I’m going to show you how.
Tip #1: Check if they’re at trade shows
If a Chinese supplier that has attended a trade show, know these two things:
1) They have high-quality products to share.
2) They paid a lot of money to go – so it indicates they’re in good financial standing.
Think about it: if their product was poorly produced, they’d likely not bother showing them at a trade show – let alone be scared to!
When selling online, a high-quality product will always resonate with your customer and grow your business. Customers are never afraid to express how they feel about a product, so a lot of positive reviews can act as a platform of social proof for other visitors that want to buy from your store.
How do you know whether a supplier has attended a trade show?
If you click on a company’s profile on AliExpress, under “Trade Shows”, you’ll see whether they’ve exhibited at any trade shows or not.
Proof that a supplier has attended a trade show is also an easy deal-breaker when having a hard time picking a supplier to work with.
However, with some of the products on AliExpress, the original manufacturer isn’t actually selling it themselves – the wholesaler is. In occurrences like this, you’d want to check the manufacturer’s profile to see if they’ve attended any trade shows, not the wholesaler’s.
Tip #2: avoid pictures with models
Check out this comment I received from a model:
Nara here is a model. And like many other models out there, she’s illegally been used as images for supplier’s product photos – an infringement of copyright.
Sadly in China, things like this are really easy to get way with, which is a big reason why manufacturers are pretty laid when it comes to this issue.
Chances are that neither you nor I live in China – so don’t have it easy when it comes to law. While the copyrighter may not immediately sue you for using their images, they can. It’s within their rights.
If you’re Private Labelling, having your listing taken down by Amazon happens very regularly. The same thing happens if you’re Dropshipping. Facebook can take your ad down – or even worst – close your ENTIRE account.
Safeguard yourself by focusing on using images without models, especially as a beginner. And if using a model in your photos is absolutely necessary…BE THE MODEL! Or you can easily hire someone to model in the image for you.
(This way, you won’t have any angry models on your back.)
Tip #3: Check if you’re working with a manufacturer, trade company or wholesaler
When working with suppliers online, these are three main types of suppliers you’ll run into.
Do you know what each of them are?
Manufacturers: These are people who originally create the item from scratch. Working with them can get you the lowest price, since there’s no middle man involved.
Trade Company: This is the middle man who works as an agent between you and the manufacturer. As a result, they have higher prices than the supplier since they need to make profit too.
Wholesaler: This is another form of middleman. The difference between them and trade companies is that they buy the items in bulk from the manufacturer, and then sell it at a mark-up price to yield a nice profit for themselves too.
On Alibaba, you’re usually going to be running into manufacturers or trade companies. To find out, go to their company’s profile, then under business type, it’ll tell you what type of supplier they are.
Another really cool and easy way to distinguish a wholesaler from a manufacturer is seeing if they sell more than one type of brand.
An easy example of this would be Transhome, a store featured multiple times on this channel. You can see from their site that these guys are clearly manufacturers, since they’re only selling one brand.
On the other hand, Mr & Mrs store over here is clearly a wholesaler, as they have a non-branded store name and they sell items made by multiple brands.
Tip #4: Recapping agreements is crucial
There are several advantages to working with suppliers in China. And obviously, one of them is their incredibly low prices.
But when I tell my friends this, they usually see it from the wrong end of the stick.
“Oh, the Chinese, they just produce cheap, trashy items!”
This is not true, and in fact, this is a really an unfair stereotype.
Yes, while there are some low-quality suppliers in China, the same is for the west, or any other country with suppliers.
I have a friend who’s an incredible artist, and every year produces a bunch of pens to sell at her booth at this comic convention. For a very long time, she’d been manufacturing these pens from England, but they weren’t quite the quality she’d wanted. For the longest time, she felt as if she was overpaying for her pens.
With a little encouragement, I told her about working with suppliers in China instead. She felt a little sceptical about the whole thing when I first introduced it, but she gave it a try.
To this day, not only did she save hundreds of dollars by working with Chinese suppliers, but the pens she now produces are much higher in quality. Moral of the story: local manufacturers aren’t better – just because ‘they’re not Chinese’.
Local manufacturers do have one advantage though. And that’s the language barrier.
When working with Chinese suppliers, whether that’s for Amazon FBA or Dropshipping, there are a lot of specific requirements you’re going to need:
- The cost per unit
- Shipping times
- Shipping method
- Size/dimensions of each carton
And a very dangerous way of thinking is to assume your supplier is going to somehow tell you all of this.
When discussing with a supplier, it’s super important to ask very specific questions.
For example, if you’re private labelling on Amazon and want to buy a bulk load of items from your supplier and want to know what your shipping costs will be, ask very specific questions like:
- What are the dimensions of each carton?
- How much do they weigh?
- How many units fit inside a box?
To go a step further, get your supplier to recap your agreements in writing. This way, there is full clarity and everyone has the same expectations.
Tip #5: Prioritise products that have multiple manufacturers
As mentioned before, most suppliers are working on very small margins. So, in case they go out of business, having other suppliers who sell the same item can be really handy to have.
Finding other suppliers who sell the same product isn’t hard at all. In china, manufacturers copy each other’s products ALL THE TIME, since there aren’t any real repercussions for it.
As you can see on Alibaba, you can see there are multiple suppliers producing their own version of this camera lens travel mug.
That means if you’re private labelling on Amazon and one day your main supplier went out of business, you have dozens of other suppliers to work with that’ll help cushion a loss in sales.
Bullet-proofing yourself from unreliable suppliers and illegal practices is the ultimate way to build a sustainable e-commerce business. If you follow these 5 tips before putting pen to paper with any supplier out there, you’ll land yourself a dream partnership with excellent suppliers who are willing to help you grow your online business.
Thanks for reading!