Hey, what's up guys? Trevor here with Ecommerce Paradise. Today's podcast is all about supplier tiers. I'm going to talk a lot about suppliers, I'm going to talk a lot about different types of suppliers, and their different traits that they may have.
Then I'm going to get into some of the things that our worst suppliers have done to us and our customers, and why you don't ever want to work with suppliers that do those things or show traits like that.
So it's going to be kind of a long episode but I think it's going to be super valuable for you guys to learn far as drop shipping goes, what suppliers you want to work with and what suppliers you definitely want to avoid.
Even if … The key here is even if the supplier has high selling products, if they're a nightmare to deal with, you definitely won't want to deal with them because you'll literally spend all your time dealing with customer service issues, dealing with dealer support that sucks, and dealing with basically dealing with a lot of drama.
Nobody wants drama in their life, especially it comes to business, because business should be a rational decision-making process. It shouldn't be such an emotional decision making process. But when you have emotional suppliers that make emotional decisions based on other dealers talking to them and stuff like that, you run into a lot of drama. So, I'm going to get into that in this episode too.
So first, I'm going to go over the supplier tiers so you guys have an idea of what that's all about. So dropship supplier tier are in three sections. You can call them whatever you want. You can call them number one, number two, number three, the best from the best to the worst. I like to refer to them as gold suppliers, silver and bronze because it kind of makes sense. Gold medal goes for the best, the silver medal goes the second best, bronze medal goes to the runner-up.
They're still a supplier but they're not that good, right, to make gold or silver. So, let's just get into it. The number one best types of suppliers you want to work with are gold suppliers. You can consider these as they don't just accept everyone that applies, they only work with a small number of select retailers. That's key.
So if you are in drop shipping and you extract suppliers from your competitor site and you call them and then you get a no or someone who says we're not accepting any online retailers at this time. Well that for sure is a gold supplier. It's someone who doesn't just accept anybody. In fact doesn't really accept people that often and you have to be really good at convincing them to accept you.
So gold suppliers will take multiple calls. It's always going to mean you having to follow up with them and provide them real sales numbers and real results and a real action plan for them to sell. All right? The coolest thing about these gold suppliers is that they actually enforce MEP policy.
That's really important, because when you're selling a product online your minimum advertised price is something that keeps you in business, keeps you profitable. So when a supplier doesn't enforce MEP policy, which is what bronze suppliers don't do they don't enforce MEP policy, then you end up running into all these competitors.
When suppliers accept everyone and all these people will just run coupons and stuff like that, you run into race to the bottom basically. You run into a lot of competitors who they run paid ads to get to the top of the listings, to get all the traffic, and then they offer the biggest coupon so they're only making a little bit of percentage of profit, 5% or something like that on these expensive products.
They end up getting burnt out and going out of business because they spend all their time dealing with really bad quality products. So you don't want to do that. So, gold suppliers will always enforce MEP policy. They're going to say you can't offer coupons on our products and you're going to have to always sell at the correct price.
The reason they do that is because then they know that they're going to have quality dealers that do more marketing than just throwing a coupon code on the site, and the manufacturer is going to be able to keep their brand equity high. So in other words, the way the customer views the product. If the customer has to pay more for the product then they actually respect that product more and they appreciate the product more. They're going to get better reviews and they're going to get more referrals that way as a brand.
So something to think about if you're also thinking about private labeling and becoming a supplier, think about being a gold supplier. Be that supplier that only works with a few select retailers that are really good and you got to vet these retailers, and definitely enforce MEP policies as supplier.
The next great trait of gold suppliers I really like is that they always offer excellent customer service, excellent service for their dealers and excellent service for their – and consumers. This means extra sale support.
So if the dealer ever has a sales question they can call the supplier at any time, the supplier helps them make that sale. Supplier will even call the customer directly and close that sale for the dealer if the dealer has trouble with it, and that's going to bub and beyond as a supplier to help their dealers out.
The dealer will learn from that and be able to close sales in the future. But, that's important. The other thing is that they'll help their customers out. So if the customers ever have issues understanding the product, they have issues using the product, maybe assembling the product, anything like that, the customer can call the supplier directly and they have a warranty department and they'll be able to work with that warranty department to get answers quickly.
They don't just have to email them, they can call the warranty department actually talk to somebody on the phone about it and they'll get answers quickly. So yes, for a supplier to be able to offer something like that they have to be a bigger business. You can't just have a supplier be a one or two man show and be able to offer all this great quality support, and that's key.
You got to understand when a supplier is a small business, yes it might be easier to break into the niche but you're going to deal with suppliers that also can't offer that same level of service to the end consumer, to the dealer that the bigger companies can.
So, the key here is finding companies that are right in the middle. They're not like the gigantic brands in the world but they're not the smallest brand, new brands either. You want to find somebody in the middle. Good support and yet there's still opportunity to sell their product online.
So, with that said, one coolest thing about gold retail – gold suppliers is that they'll actually refer business to their dealer base. That's because they work with a select number of dealers and they have a really good relationship with them and the dealers work directly hand-in-hand with the suppliers to sell more of the products and keep the prices high and keep the customer satisfaction high.
So the supplier can refer business to the dealer via the phone or via their website. That's really cool when it when the supplier is willing to put a link to the retailer's website and say buy from our dealers then they're creating a really strong dealer base that will support their business in the long run.
They'll be able to put out all the marketing efforts and marketing dollars that they need and advertising dollars that the supplier needs to sell their products. The dealer will take a lot of the customer service out of the hands of the supplier, especially the pre-sales support, which can take a lot of time to deal with.
So those are only what the best suppliers do is they actually refer business to their retailers. You don't get that a lot. That's very rare. So, if we're talking about pros and cons of dealing with gold suppliers, there really are no cons to dealing with a gold supplier, there's only upsides. The only con of course is that you – it's just harder to get them on board. It takes more time to get them onboard.
As far as pros go, you know your profits are protected by MEP, you get the good customer support and quality control and that's another key here is that gold suppliers offer really good quality products. They usually even offer a white glove delivery service. So that means that the products will arrive and 100% assembled and they'll even be put into the person's house or wherever they're being delivered to.
That's a really cool service because a lot of customers, when it comes to actually assembling a product, are really confusing. A lot of people have ADD and stuff so they don't assemble it correctly because they just kind of skip certain points.
A lot of times the worst suppliers, what will happen is they'll link up with manufactures in China that they either don't put the product together correctly, there's like weird configuration issues or they don't do any quality control when the product arrives at their warehouse in the US.
The issue there, especially with complicated products or big products, is that if you don't do quality control before you ship them out as a supplier you'll have products that are messed up when they arrive at the customer's place.
It could be shipping damage but a lot of the time it's actually things that were messed up at the factory in China. Because in China the way it works is that a lot of these manufacturers when they get these big orders, they realize that the only way to increase their margins on those orders besides getting more products is to actually cut their costs.
By cutting costs what they mean is cutting the quality of the products and the quality of the workmanship puts in the products and the quality of the quality control to make sure the testing that products are correct, and the checking of the products and make sure they're not damaged before they get shipped out.
Then, of course, there's shipping damage that might happen when they're being loaded into the containers or taken out of the containers. There're shipping damage that might happen when they're being loaded into the warehouse in the states and taken and put on to UPS trucks or FedEx trucks and shipped to the consumer.
So there's so many different points at which a product moves since in the supply cycle that damage can result. If that product isn't protected properly or configured properly all the way and there's quality control inspections at each point along the way, it's very likely that product will arrive damaged. The worst suppliers, the bronze ones, they don't do any quality control.
They literally get the package at their warehouse and it ships right back out. But gold suppliers will. They'll actually quality control. They'll take the product out, they'll make sure it's configured correctly, they'll spend the time to do it. Might take an extra day, but it'll be configured correctly.
Then, they will actually palletize it if it's big and ship it via a freight truck instead of regular FedEx delivery so it just doesn't gets thrown around. Then, they'll actually provide a white glove delivery service of some sort. Maybe the customer has to pay for it, maybe the retailer covers that, but there's a white glove delivery service and that's key.
Of course, like I mentioned, gold suppliers will send you customers and that's pretty cool. They realize that if the dealer takes the order then they're obliged to do the customer service and warranty support. So that's pretty cool. Gold suppliers will also, of course, there'd be less competition selling their products.
So it'd be quite a bit easier to sell them. Now they're not going to accept you unless you're a very strong marketed website with a big marketing presence online and lots of quality content and quality support. But, when you do get there, it's going to be a win-win because they'll now have a dealer, a retailer that's very, very high quality as far as their marketing and support goes.
Then the retailer will win because there's a lot less competition to sell their product and they're not going to deal with a lot of price matching issues because customers will go to other websites that just offer coupons in order to get sales.
So that's pretty cool. But like I said, as far as cons go with the gold supplier, the only one is that it's hard to get approved if you have no sales history. All right, so let's move onto silver suppliers. Silver suppliers are the ones you want to go for when you're first getting started out because yes they review all potential retailers. They don't just accept everybody.
They'll actually look at your website and it'll take a day or so and you'll go back and forth with them usually by email or by phone call. Usually you call first to talk to them, you introduce yourself, you introduce your story to them and all that.
Then you ask for a dealer agreement and they say yes or no and then if they say well give us a day we got to review your site and stuff like that, then you'll have to follow up with them. But that's a silver retailer usually, especially if they have four or five plus online retailers selling a product already.
Silver retailers should enforce MEP policies. That's what they do. MEP policy, like I said, is the most – one of the most important things in selling online, because then you can market to people in other ways, you can win the sale with better copywriting, with free gifts and things like that and in just more marketing presence.
They'll offer great support and that's important. So your profits are protected by MEP. You'll get that quality control and that quality support and there's tons of them out there. So, the gold suppliers, there's not so many of them but with the silver suppliers there are. There's a lot. So it's really cool.
The only thing about these products that are offered by these suppliers that take on more retailers that your traffic must be really well optimized. What I mean by optimized traffic is that you have to find ways to get people that are at the bottom of the buying cycle when they're ready to buy to come to your website.
There's a few key ways to do that and I teach that in other videos, but I'll tell you the gist of it right now. The two ways are to use shopping ads on Google. People that are typing that search query, that long tail search query, in other words, the product name into Google and being at the top of the search results with a picture and a price and a special offer, that's a Google product listing ad, it's a Google Shopping ad and that's the best place to be.
The next best place to be is in review content. So, a YouTube review video and a blog review content post. Then the next place is to be sharing that content all over social media so they'll find that. But, the key thing is here people at the bottom of the buying cycle they type in the product into Google to buy it and they'll type in modifiers like buy this or sale or whatever.
Then they'll also type review into YouTube usually or Google and they'll find review videos. Review videos made by the supplier is great; reviews made by the dealer is even better. They'll go right to your website and probably buy that product.
So that's the way to do that. You have to optimize the traffic or else you're just not going to get the sales. So, we talked about or I've talked a lot about the bronze suppliers already. But, I'll go over it again just to kind of repeat what I said and also drive the point home that you don't want to work with these types of suppliers.
So, bronze suppliers, they literally accept everyone who applies. They'll even have like an application sheet on their website to make it way too easy to apply for them. Gold and silver suppliers usually have to call them, they're not going to have an application on their website.
If you do email them through their website, they're going to ignore that. Sometimes if you just email them too they'll ignore that. They're not going to even talk with you unless you call them, because they know that the best dealers and retailers are used to calling people and they're on the phone all the time and that's what you want to know. You want to know if you can get …
PART 1 OF 3 ENDS [00:13:04]
Retailers are used to calling people, and they're on the phone all the time, and that's what you want to know. You want to know if you can get on the phone with somebody in a quick manner or not, and that's important. Bronze suppliers, they'll make it way too easy to apply. They're going to have an application right there on their website. Some silver suppliers will have applications on the website, and that happens when you have a bigger company, you've been in business longer, so you know that they've been in business for a long time. But you're still going to have to supply them with all the information for your business, like your seller's permit, and they'll ask for sales numbers and all that stuff, to make sure you're a quality supplier.
But bronze retailers literally will accept anyone. Sometime bronze retailers will just tell you, because they don't even enforce MAP policies, they'll just tell you yeah, just list our products on your site and sell them, and you can buy them right directly off our site. And that's definitely a supplier you don't want to work with, because anybody can list that product across the web, for whatever price, and there's no price control, and nobody's going to want to buy it from you. They're not going to see any benefit.
Of course, the biggest issues with bronze suppliers is the lack of customer service and lack of quality control. You'll have product shipping damages all the time. You'll have product defect issues all the time. And the warranty issues can line up and last for months. The customer service from the dealer support and from the customer support, warranty support departments at the supplier will be terrible. It'll be hard to get ahold of them. The phone wait times will be a long time. The emails won't get answered back in a quick manner. And if there's ever big issues that need to be resolved, they might even just plain out ignore you, and that's one of the biggest issues that we've had with some suppliers, well, one in particular. But I'll get into that in a little bit.
Of course, pros and cons of working with bronze suppliers is, pros are pretty much none. Just don't work with them. Again, bronze suppliers are easy to get onboard with. They sell pretty much in every website. There is no MAP policy. They don't enforce coupon restrictions. They won't ever send you any orders, they might even sell direct. They even might sell below their own MAP direct to the public. I've had that before, where a supplier will literally undercut their dealer base, because they'd rather just make the sale themselves and keep the customer service and sale in-house. Which makes sense, but still, why would a supplier accept or even give dealers an opportunity if they're going to undercut them on big marketplaces like eBay and Amazon and their own website? So it doesn't really make any sense.
Yeah, there's so many reasons why you don't want to work with bronze suppliers. I don't know what else to say. So I'll get into the next section, things our worst suppliers have done to us and our customers. This is kind of like a story telling time. I'm not going to list any of the names of suppliers. I'm not going to list our niche or anything like that, but I am going to tell you guys sort of what happened. In a general sense, you'll understand why you don't want to work with these types of bronze suppliers. Some suppliers can kind of disguise themselves as silver suppliers, like they'll offer some certain things and seem like silver suppliers, and then you get to actually selling the product and going through their customer service and dealer support, and you'll realize that they actually are bronze suppliers to deal with. So be careful and be wary of them.
And if any of your suppliers start showing traits, like these stories I'm about to tell you, avoid working with them. In fact, let them know that you're going to not be doing business with them anymore. It's for your own good, because you just don't want to be in a space to be pulling your hair out every day. We've been going through this for the last few years, and it's tough. You end up spending all your day spinning your wheels, trying to figure out customer service as you're fighting back and forth with the supplier to get customers taken care of. Literally, there's so much abundance out there, there's so many niches that are great, that you just don't want to deal in a niche with suppliers that are like that. And if you are, then only work with suppliers that offer great support, and if they don't sell as well, well then that is what it is, and put your time and effort into building a new site out in a different niche with better suppliers.
All right, let's get into it. One of the first things that's happened to us is, the supplier will not answer their phone. Like I was saying about bronze suppliers, they don't answer their phone. They have limited support agents available. Some agents have a bad attitude and no power to take any action to resolve an issue. That's really tough and annoying to deal with, because you have to spend so much time on the phone, and your time is valuable as a marketer. You could be out there creating content, building a team, doing more marketing, improving your ads, improving your website, whatever. All this stuff could be improved, and yet you're spending that time on the phone. Even if you have a VA doing this, you have your VA spending time on the phone with a supplier, trying to figure out an issue, when they so many other things they need to be dealing with. And it can be very, very tough and annoying and time-consuming and really burn you out over the long run.
So if the supplier that you have doesn't answer their phone consistently, you have to call them over and over and over again just to get through, if they only have a few support agents that seem like they're always flustered and don't know what to do, or they have support agents with a really bad attitude, and they treat you bad, and they treat you unfairly, or they just have no power to take any action on your issue, and they have to speak to a higher-up, which is a person that's like not even at work at that time or they're un-contactable, if things like that start happening, you have to drop them. You will literally pull your hair out.
All right, the next thing. When a supplier doesn't call you back when you email them or leave messages, and you request a callback, and they email you back and just tell you straight up that they're not going to call you, that is like the worst possible thing that any supplier can do. It's happened to us. It happens to us multiple times, and it's so strange, because you're supposed to have a good relationship with your suppliers. And you need a callback on an issue, because you want to get it taken care of right away, and you keep calling, and nobody answers. And then they just tell you they're not going to call you back. It's like childish, it's very childish, it's unmature. If your suppliers ever do this to you, seriously take that as a sign that you need to drop them as soon as possible, even if their products are selling.
All right, so I'm going to get into some different issues we've had with warranty and shipping damages with suppliers. The first one is, when a product is defective, and the supplier requires it to be shipped back before a new one will be sent out, that's just terrible support. If a product arrives and it just doesn't work, the supplier should ship one out right away and provide a call tag for that customer to ship the bad one back. They shouldn't tell the customer, oh, you have to pay to ship the product back. We're going to test it for a week, and then we're going to ship you out a new one if it turns out that it's actually defective.
It literally takes two weeks just to do that, and all of a sudden, you do that, the customer gets pissed. Of course they get pissed, because they can't use their product. So whatever it is, if it's just a table or something like that, you have a broken leg, yet they tell the customer, oh, you have to ship that broken leg back, that's the most ridiculous thing in the world. So good suppliers will never do that. They'll ship out a new product, and if it's even worth shipping the broken table leg back, then they'll provide a call tag for that.
When it comes to selling electronics online, like computers or TVs or anything like that, and you get warranty or shipping damage issues, that's some of the worst possible stuff you can deal with, because customers ... They don't know if it's a customer that's just kind of stupid and doesn't know how to use it, or they just don't want to learn how to use it and they just want it to be perfect, like it's a toy or something like that. So those niches are very dangerous to be in, because you know you're going to be pulling your hair out a lot, because electronics are notoriously difficult to keep good quality control with, especially when they come from China and they're built in China a lot of times, and there's a lot of shipping that goes in between. All these things can knock electronics around, so computers, TVs, all that stuff, stay away from that if you can.
When a product arrives damaged and they require it to be shipped back before a new one will be shipped out is just the worst possible thing. If that happens, you can tell your supplier that that's a bad business practice and there's many other suppliers that will offer way better control and quality control to keep their brand image high. You can understand why a supplier accepts everybody, is because they lose a lot of their dealers all the time, so they have to keep accepting anybody who will sell their product. And those dealers will end up getting the bad reviews when the supplier sucks. Sometimes the customer is smart. They go online, they find the supplier's social media channel or something like that, and they'll leave a negative review on that. And then the supplier gets pissed at the dealer, not the customer, and doesn't decide to help the customer, because it's mad at the dealer for that.
That actually happened to us. One of our customers left a bad review on the manufacturer's website, on the supplier's website, on their Facebook page, and they came after us, thinking that we had left the review. I thought that was hilarious, because they knew there was an issue with this customer, that their product wasn't working and they wanted a replacement, but yet instead of fixing the issue, they decided to take it out on us in a weird, emotional, childish way. Look, if suppliers ever act that way towards you, drop them immediately. Your time and your effort as a marketer is worth a lot of money, so don't let them treat you like that.
As far as warranty shipping damage issues go, if it takes a long time to get responses back, that's a bad sign. They should be able to respond to you immediately on issues. There should be somebody there that's trained properly, that has a good attitude, and that works fast. There should be multiple people like that, and that's how good suppliers work. Good suppliers will have a good attitude and will want to take care of the customers, no matter what. That's the key to a good business. Look at Amazon. Their main issue is taking care of the customers, no matter what, and they're huge, and they continue to grow every day, because they do that.
The last thing here is, warranty issues can take months to resolve sometimes with bad dealers. We've had issues that keep going out and out and out, and because of bad product quality, one thing fails and the other thing fails, or one thing breaks and the other thing breaks while it's in the warranty period. The supplier will go back and forth with the customer, and we'll go back and forth with the supplier, and it's just a mess. It goes on and on. If you ever end up dealing with this kind of stuff with one certain supplier, just know it's probably better to seek out other suppliers and then drop them before you keep pulling your hair out. Don't just keep going with a supplier like this, guys, it's really bad for the long run.
All right, so let's talk about return issues. Here's a story for you. Like for instance, when a product is within the return policy and defective beyond repair, and replacement parts won't solve the issue, which is usually what warranty policies say, so a product is within the warranty policy, it's defective beyond repair, and replacement parts won't solve the issue, or the customer is incapable of doing the repairs, and it'll cost them a bunch of money to hire somebody to do the repairs, that's possible too. Or they just live in an area where nobody could do the repairs cost effectively. If the supplier does not want to accept the return, and refuses the return, which has happened to us, or the supplier won't issue a call tag for the defective or damaged product to be returned and leaves the responsibility on the retailer or customer to pay for the return ...
So I'll repeat that again. The supplier might not want to accept the return, and refuses the return, and leaves it upon the retailer, the dealer to accept the return for the defective product that's within the warranty policy. And it's not because of buyer remorse, because the product doesn't work, and the customer can't fix it. Or the supplier won't issue a call tag for the defective or damaged to be returned and leaves the responsibility on the retailer or the customer to pay for the call tag for the return. It's just a bad business. It's just bad business practice, truly, and it's not good brand-building. It's going to turn into a lot of customer dissatisfaction, negative reviews, scam posts online, BBB claims. All this stuff results as a result of not taking care of customers when things go awry.
The funny thing is, if you just spend the hundred bucks or whatever it takes to take care of a customer in the first place, quickly and effectively, efficiently, happily, respectfully, the customer will be a fan for life and they'll keep buying from that brand, because they'll know no matter what, if the worst thing happens, they'll be taken care of. And that's key. In business you have to treat your customers like family. You have to treat them like it's your own family. You want to maintain a good relationship with them. And that's key. It's good to know. We have a policy that if anything takes a hundred bucks or less to fix, just do it. If it takes more than a hundred bucks, we're running to the supplier, and we'll say you guys have to take care of this. This is a big issue. And then we try to take care of the customer.
That's our policies, and that should be your policy as well, as a business owner, because that's key. If you want to build a good brand, every interaction you have with the customer builds your brand. So just understand that. Suppliers that don't take their brand-building as the number one thing in their business, in other words, taking care of customers as their number one thing in business, are suppliers you just don't want to work with.
All right, bad suppliers might have packaging issues, and we've seen this a lot, especially with products that are big, because FedEx and UPS charge oversize fees, like crazy, immense oversize fees when it goes over, just like a centimeter over their size. So if the product is big, the supplier might cut corners with the packaging in order to reduce shipping costs on their end. And that includes buying cardboard boxes that are actually thinner that they should be. If it's a big product, you gotta buy thick cardboard, but thinner cardboard costs less and it can keep the product within the measurements for not being charged an oversize fee. But that results in damaged products arriving, because UPS and FedEx literally throw things around. Even the freight truck, things can be jostled around inside of a freight truck if there's a lot of stuff or it has to be moved from one freight truck to another along the route.
That just all ends up in upset customers, and it leads to more returns and expensive call tags and negative reviews, and it just goes down this spiral. When you have a supplier that does that on a consistent basis, cuts cost with packaging in order to reduce their shipping costs ... you know, you get this with the suppliers that offer the cheapest products in your niche. If you have a product, your main product, and you have the one supplier, two suppliers, whatever, that offer the cheapest version of that product, that's because they're cutting ...
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Our two suppliers whatever that offer the cheapest version of that product. That's because they're cutting corners. It's not because they're magically coming up with some amazing thing that works. No. They're cutting corners and costs. They're cutting corners and product quality and they're cutting corners in packaging. They're cutting corners in their customer support. Be very wary of selling the cheapest products in your niche. Be very wary of those suppliers.
All right. Product quality issues. Let's talk more about that. When a supplier, when you have a high percentage of the suppliers products arriving defective that can't be repaired, be very wary. It's either the products can't be repaired or the supplier isn't willing to repair them or isn't willing to offer replacement. If it happens more than a few times throughout your order, throughout your months and stuff like that, you have to end up dropping them because if you keep them on as a drop ship supplier in your store, it's going to diminish your brand name. It's going to diminish the referrals you'll get and your business won't do as well because the supplier that you have are not quality suppliers.
Number two. Products arrive with strange configurations that are obviously factory mistakes. If the supplier doesn't go to China and check in with the factory, make sure they're doing the best quality possible. If there's no management along that supply chain, that will happen. It happens more often with suppliers that are really bad. It happens a lot less often with supplier that are great because they do the management that's necessary. They know that's necessary so they do it.
If you have a high percentage of these weird configurations that customers complain about, be wary of that because it means they're cutting corners elsewhere, too.
Number three. Products aren't checked for quality control when they land in the suppliers warehouse from China. This is key. A supplier needs to open the box, look at the product and look through and make sure it's not missing something. Make sure it's not completely broken before they ship it out.
If they just get it and then slap a sticker on it and ship it right back out, that product could have arrived completely damaged or misconfigured. It goes on the drop ship dealer. All the blame for that goes straight to the drop ship dealer. The customer thinks that the product came from the dealer, not from the supplier. They don't understand the supply chain in drop shipping, which is okay. It's the dealer now that gets the front end.
When you have suppliers like that, you end up getting all the customer support issues. You end up getting people calling, being pissed off, yelling at you, blah, blah, blah, leaving negative reviews, getting crazy emotional with you understandably. You're going to end up fronting the cost for the call tag probably because the supplier cuts costs there, too, and doesn't offer good support. That's just what happens when products arrive with defects and malfunctions a lot. Strange configurations. People will get mad. People get upset.
Another thing is bad suppliers, they won't put any extra effort into creating quality product manuals. The manuals might not be clear, or they don't reflect the actual item, but instead they might reflect a whole general line of the items that the item is in. That's just ridiculous. It's like the cheapest possible thing you could just do to offer better quality support with your products is have a good product manual because everybody looks for the manual when they first get their product.
This goes along with the next thing I'm going to talk about, which is the lack of marketing materials created by bad suppliers. Created by suppliers that are low quality. You want to watch out for this.
If you are researching suppliers online, and you cannot find any assembly video; if it's a product that requires assembly and you can't find any sales videos, on the competitors sites there's not really high quality pictures or there's very few and low quality provided, be very wary because that means they're cutting corners. Their duty as a supplier is to create sales videos for their products. Every single product should have a good sales video. Every single product should have a good assembly video. If they want to sell a product, they're going to have to create a sales video, bottom line. Video is the cornerstone of marketing in today's world.
If they don't have assembly videos or sales videos, then it's a big issue, and you should be careful of that. Especially if it's a big product that's expensive and there's no sales videos or assembly videos, you end up having to buy their product yourself or go to their warehouse yourself, take your time, film all those videos yourself and then post it to your YouTube channel.
While that's really good and that's a great opportunity for you, especially if you're into the niche, and you really like it. It's a passion thing for you, that can take a lot of your time and effort. You won't have time, as much time to do enough internet marketing, email marketing, social media marketing as you could. Advertising as you could if you didn't have to go film those assembly videos, film those sales videos.
Now on the other hand as a high quality retailer, you should be doing sales videos yourself. Now you don't necessarily have to have the product with you to do a sales video. You could create a slide show for free on Google Sheets. Put pictures of the product up. Put bullet points about the product and have yourself in the video or not and post it to your YouTube channel.
If you have those quick sales videos, you're going to raise the quality of your retail brand very high and you'll attract more of these gold suppliers. So I definitely recommend doing that.
If your product requires assembly, consider making the trip out to the manufacturer's warehouse in the states where the products are and asking to see their showroom and then going through the assembly process in one of their demo models. Or just asking them if you can assembly one of them out of the box because that's a really good idea.
But again, if the manufacturer, if they're not doing these videos, if they're not doing the marketing materials for you, that means they're cutting corners in their marketing costs. That means they're probably cutting corners elsewhere, too. Especially if they have the cheapest products.
If they have the cheapest products that shows they don't have their profit margin to support marketing costs or support costs. That's a danger to look out for.
The next one, I'll talk a little bit more about dealer support. We've been running into a lot of dealer support issues lately that they just are so time consuming and annoying to deal with because as a supplier, they're like your employer in a way, sort of. Think about it. You're a partner with them and because you're a partner with them, you rely on them for your business and they rely on you for their business. You have to have a good relationship with them. It goes both ways.
If you receive really bad support from them and it's unfair to you across the dealer base, they don't require the same thing of other dealers as they did you, or maybe a dealer wants to make more sales is telling them, hey, if they cut you out, they'll do more advertising and sell more of their products. If that's happening in your niche and that supplier's okay with it, that is a terrible supplier. You should not do business with that supplier.
First of all that is illegal and it's against FTCF antitrust laws, but secondly, it's just bad business practice and it's really immoral. It's actually happening to us. That's the crazy part. We have to deal with this in real life. This isn't like I'm just making all this stuff up. All these things will happen when you deal with crappy suppliers.
Because we have one main supplier that gets the lion share of our sales because they offer the cheapest products and people are always looking for the cheapest, best deals. Then we have to deal with competitors that are always offering coupon codes.
It's tough because now there's a race to the bottom on the cheapest products, but the suppliers that provide the worst support possible. So you're making zero profit and you have to spend all your time with crappy customers. Because when you sell cheaper products you get the worst customers. It's just literally a race to the bottom. It's a race to the bottom of your life as well. You don't spend your time learning any new marketing skills. You spend your time dealing with support issues. You are literally pulling your hair out when this happens, so let's talk about it.
Dealer support point one. In consistent map policy enforcement across dealers. If they come at you on your website and they're going to tell you, "Oh, you have a coupon on your site and yeah. Take it off or we're going to stop your dealer agreement," or whatever. Then you go to your competitors and they have blatantly clear coupons on their website, it seems so silly because they may have emailed them, but then maybe check a week later and they still have the coupon on their site. That's crazy. Never work with those suppliers.
Number two. If the supplier has an issue and they use their emotions as far as the decision-making process goes instead of making rational business decisions. For instance, if you remove the coupon from your site, and then they're still blocking you for some reason to make a point or whatever, then that's really, really bad and you don't want to work with anybody that makes emotional business decisions.
Business is a very rational thing as far as working to solve customer issues. It's a procedure and you follow it. If you have a supplier that doesn't follow procedures or has weird procedures and has different procedures according to the day, you just don't want to deal with it. You'll be pulling your hair out.
Number three. If the supplier has inconsistent inventory. Items that are always running out of stock or the stock on the dealer portal if they have one is not up-to-date or on the dealer sheet.
Let's say you get an order for a really profitable product and all of a sudden it's out of stock even though it shows it's in stock on the supplier's website. That is terrible. How can you run a business if you're spending money to advertise products that are either low quality or are out of stock when you make the sale.
It literally is an unprofitable business model. You have to only work with suppliers that have consistent inventory that they know that a season is coming up, if it's a seasonal product, and they order enough ahead of time. Or they give you a heads up like, "Hey, we're running low on stock. You might want to lower your ads or your marketing budget for this product until we get more in." That kind of thing is great. The worst suppliers, they'll never do that. They'll never even update you hardly.
They'll just have a dealer portal and they will not care. This is happening to us. It's tough to deal with and it's annoying. We're literally going to drop this supplier because of the way they're treating us and the way they've acted over the last few years that we've dealt with them.
Number four. They accept anybody who applies. That results in you having to deal with a lot of these other online only competitors that only offer coupon codes to compete. It's so annoying because when it comes to marketing, you don't have to discount the prices to compete. You can offer way better copy, way better things as far as guarantees, and as far as free gifts go, that doesn't have to lower the sales price of the product.
That sale price of the product, that's the most important thing. That's the profit. That also keeps the value of the product high and it keeps the customer from acting like a crazy person. When people get discounts on products they're afraid they're going to get scammed and so they act crazy. When they don't get discounts, when they paid more money, they don't think they're getting scammed. They think they're dealing with a quality retailer and they don't get crazy. It's just how it works. It's how our psychology works.
Humans are so crazy like that. They're emotional beings. We're all emotional beings. It's how we work.
If you avoid offering coupons and you do way better with marketing than free gifts, you'll win in multiple ways than one. Supplier that don't enforce that, they accept anybody that applies and there are all these new people have coupons, they're just the worst suppliers to work with. Seriously.
Number five. The last one with the dealer support is customer service is usually lacking with these guys. Like I was saying before with the wrong suppliers, you call in, it takes a long time to get a hold of anybody. The people that you get a hold of either have a bad attitude to work with or they just can't do anything on their end. They have to wait til the person who's the manager who has a bad attitude usually, makes a decision on it.
That person might take a whole day or two to do that decision while your customers are waiting for a resolution for their issue. What a pain in the ass that is. From a retailer's perspective, you're relying on them for support when they have terrible support.
The only out you have is to just give that person a call tag and a refund. That could be very costly. Instead of making the $100 profit on that sale, you lose $100 and you lose the time that you spend dealing with it. That is a huge headache and it's an unprofitable way to run a business.
Those are my dealer support issues that we've been having with one of our biggest brands that sells cheap products. Yeah. You just don't want to work with these brands, guys. Honestly, it literally will end up and you pulling your hair out. You have way better things you can do with your time.
You can learn to be a better marketing, better salesperson. Learn how to build sales funnels online. There's so much abundance out there. You just don't want to waste your time with bad suppliers.
Let's talk about that. Suppliers that cut dealers out. Number one, they don't refer business to the online retailers. Instead, they even sell direct to the public themselves through multiple channels. How crazy is that?
If you're going to have a dealer base, why would you sell direct through eBay and Amazon. Even sell under the price that ... your listed mat prices. I've had this happen before. It's just crazy. It literally makes the niche completely unprofitable or the supplier's products unprofitable. You just can't sell them anymore. It makes no sense.
Because by the end of the day if the product arrives correct and undamaged, you will have spent so much time dealing with issues that you're making no money and you're spending all your time.
If anything, yeah, it's a good lesson learned. It's a good lesson in marketing and customer service and sales.