How To Find Quality Drop Ship Suppliers and Which Type of Supplier You NEVER Want to Work With
Hey guys! Trevor here from eCommerce Paradise.
Today's podcast is all about supplier tiers. This is going to talk a lot about suppliers. I'm going to talk a lot about the different types of suppliers and other different traits that they may have. I'm going 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 that.
It's going to be a long episode. I think it's going to be super valuable for you guys to learn.
The key here is that even if the supplier has high selling products, if they're a nightmare to deal with, you definitely won't deal with them. You'll literally spend all your time dealing with customer service issues, dealing with dealer support that sucks, and a lot of drama. Nobody wants drama in their life; especially it comes to business.
A business should be a rational decision-making process.
It shouldn't be such an emotional decision-making process. When you have emotional suppliers that make emotional decisions based on other dealers talking to them, you'll run into a lot of drama. I'm going to get into that in this episode, too.
First, I'm going to go over the Supplier tiers.
Dropship supplier tiers are in three sections. You can call them whatever you want. You can call them number one, number two, and number three. I like to refer to them as Gold, Silver, and Bronze because it makes sense.
Let's get into it.
The number one best types of suppliers you want to work with are the 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.
If you are in a dropship and you extract suppliers from your competitor site, and you call them, and then you get someone who says we're not accepting any online retailers at this time, that for sure is a Gold supplier. As someone who doesn't just accept anybody, you have to be really good at convincing them to accept you.
Gold suppliers will take multiple calls, and it's always going to mean you are having to follow up with them and provide them real sales numbers and real results and a real action plan for them. The cool thing about these Gold suppliers is that they actually enforce that policy. That's really important because when you're selling a product online, your minimum advertised price is something that keeps you profitable. So when a supplier doesn't enforce map policy, which is what Bronze suppliers don't do, they don't enforce that 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 a race to the bottom.
Basically, you'll run into many competitors who run paid ads to get to the top of the listings to get all the traffic. They go for the biggest coupons, so they're only making a little bit of percentage of profit, like about five percent of these expensive products. And they end up getting burnt out and going out of business because they spend all their time dealing with really bad quality products. You don't want to do that.
Gold suppliers will always enforce map policy. They're going to say that you can't offer coupons on their products and you're going to have to always sell at the correct price. They do that because they know that they can have qualities, dealers that do more marketing than just throwing a coupon code on the site. The manufacturer is going to be able to keep their brand equity high.
In other words, if the customer has to pay more for the product, then they actually respect that product more. They appreciate the product more, and they're going to get better reviews. They're going to get more referrals that way as a brand. That is 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 a few select retailers that are really good. You've got to vet these retailers and enforce policies.
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 expert sales support.
If the dealer has a sales question, they can call the supplier any time. The supplier helps them make that sale. The 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 above 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. That's important. And the other thing is that they'll help their customers out if they have issues using or assembling the products. A customer can call the supplier directly, and a Gold supplier would have a warranty department. The customers don't just have to email them, they can also call the warranty department and 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 call support. And that's key to understanding the suppliers.
Yes, it might be easier to break into the niche, but you're going to deal with suppliers. Small companies can't offer that same service level to the consumer and to the dealer, but the bigger companies can.
The key here is finding companies that are right in the middle. They're not like the world's gigantic brands, 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 an opportunity to sell their product online. So with that said, one cool thing about Gold retailer gold suppliers is that they'll actually refer business to their dealer base. That's because they worked with a select number of dealers and they have a really good, really good relationship with them. The dealers work directly, hand-in-hand with aspirations to sell more products, keep prices high, and keep customer satisfaction high. So the supplier can refer business to the dealer via the phone or their website.
When a supplier is willing to put a link to the retailer's website and say "buy from our dealers," then they're creating a 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, advertising dollars that the supplier needs to sell their products. The dealer will take a lot of customer service out of the supplier's hands, especially the presale support, which can take a lot of time. Those are what the best suppliers do. They refer business to the retailers, which you don't get a lot. That's very rare.
If we're talking about the pros and cons of dealing with Gold suppliers, there are really no cons to dealing with a Gold supplier. There are only upsides. The only con, of course, is for you. It's harder to get them on board. It takes more time to get them on board. As far as pros go., your profits are protected by the map. You get good customer support and quality control. Another key here is that Gold suppliers offer really good quality products. They usually even offer a white glove delivery service. That means that the products will arrive 100% assembled, and they'll even put into the person's house. They're being delivered to. And that's a really cool service because a lot of customers, when it comes to assembling a product, are really confused. And a lot of people don't assemble it correctly because they just kind of skip certain points. This happens a lot of times with the worst suppliers.
What happens with manufacturers in China is 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 the 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 reship 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. Most of the time, a lot of things were messed up at the factory in China. When they get big orders, a lot of these manufacturers realize that the only way to increase their margins on those orders besides getting more products is to cut their costs. By cutting costs, what they mean is cutting the quality of the products and the quality of the workmanship it puts in the products and the quality of the quality control to make sure in the testing products are correct. The checking of the products makes sure they're not damaged before they get shipped out. And then, there's shipping damage that might happen when they're being loaded into containers or taken out of the containers. That might happen when they're being lowered into the warehouse in the States and taken onto UPS trucks or FedEx trucks and shipped to the consumer.
There are so many different points at which a product moves in the supply cycle that can result in damage. If that product isn't appropriately protected or configured correctly, there are no quality control inspections along the way, the product will likely arrive damaged.
The worst suppliers, the Bronze suppliers, they don't do any quality control. They get the package to the warehouse and ship back out, which is different from Gold suppliers. Gold suppliers do quality control.
Gold suppliers make sure it's configured correctly. They'll spend the time to do it, may take an extra day, but it'll be configured correctly. And then they will actually palletize it if it's big and ship it via a freight truck instead of, you know, regular FedEx. Labor doesn't get thrown around, and then they'll actually provide a white glove delivery service of some sort, maybe the customers to pay for it. Maybe the retailer covers that. But there's a white glove delivery service, and that's key. And of course, as I mentioned, you know, Gold suppliers will send you customers, and that's pretty cool. They realized that if the dealer takes the order, they're obliged to do the customer service and warranty support. But also, of course, there'll be less competition. It will be quite a bit easier to sell then. Now, they're not going to accept you on this. You're a very strong market website with a big marketing presence online and lots of quality content in quality sport. But when you get it, there can be a win-win because they'll now have a dealer, a retailer that's very high quality as far as their marketing sport goes. And 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, already get sales. So that's pretty cool. But like I said, for as far it's cons go with the Gold is that it's hard to get approved if you have no sales history.
Let's move on to Silver suppliers. Silver suppliers are the ones you want to go for when you're first getting started out because 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 first call them to talk to them. You introduce yourself, 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, "give us a day, we've got to review your site and stuff like that," you 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. Retailers should implement enforcement policies. That's what they do.
In map policy, one of the most important things is selling online because then you can market to people in other ways. You can win the sale with better copywriting, with gifts and things like that. And just more marketing presence. They'll offer great support, and that's important. Your profits are protected. You'll get that quality control and that quality sport, and there are tons of them out there.
There are not so many Gold suppliers. But with the Silver players, there are there's a lot. The other thing about these products offered by these suppliers that take on more retailers is 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 are 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 longtail search query, in other words, a 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 list, a Google shopping ad. That's the best place to be.
The next best place to be is in review content - YouTube review video and a blog review content post. Share that content all over social media. The key thing here it the people, 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. And then they'll also type review into YouTube usually or Google, and they'll find review videos and review videos made by the players. A great review to be made by the dealer is even better. And they'll go right to your website, and probably buy that product. That's the way to do that. You have to optimize the traffic, or else you're just not going to get the sales.
We've talked a lot about suppliers already. But I'll go over it again to repeat what I said and drive the point home that you don't want to work with these types of suppliers.
Next is Bronze suppliers. They literally accept everyone who applies, and they'll even have an application sheet on their website to make it way too easy to apply for them. You know, with Gold and Silver suppliers, you usually have to call them. They don't have an application on their website. If you do email them through their website, they're going to ignore that.
Bronze suppliers make it easy to apply. They're going to have an application right there on their website. And, you know, that happens when you're a bigger company. You've been in business longer. 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 sellers permit. And the last four sales numbers and all that stuff to make sure your quality supplier, Bronze retailers, literally looks at anyone. Sometimes Bronze retailers will tell you to list their products on your site and sell them, buy them directly to their site. That is because they don't have the map policy. And that's definitely a supplier you do not want to work with because anybody can list that product on across the Web for whatever price. There's no price control, and nobody's going to want to buy it from you. They don't see any benefit.
Of course, the biggest issue with Bronze suppliers is the lack of customer service and lack of quality control. You'll have product shipping damages all the time. You have product defect issues all the time, and issues can line up in four months. The customer service from the support departments will be terrible. It'll be hard to get a hold of them as phone wait times will be a long time. The emails won't get answered back quickly. 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.
So, of course, the pros and cons of working with Bronze suppliers are pros are pretty much none. Just don't work with them.
Bronze suppliers are easy to get on board, and they sell pretty much, but there is no map policy. They don't enforce coupon restrictions. They won't ever send you any orders. They might even sell direct, and they even might sell below their own directly to the public. I've had that before. A supplier will literally undercut their dealer base now because they'd rather make the sale themselves and keep the customer service and sale in-house, which makes sense, but still like why? 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, their own website? That doesn't really make any sense.
There are 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 that the worst suppliers have done to us and our customers.
This will be kind of like a storytelling time. I'm not going to list any of the names of suppliers or even nature, but I will tell you what happened. You'll understand why you don't want to work with these bond suppliers in a general sense.
Some suppliers can kind of disguise themselves as Silver suppliers. They'll offer some particular things and would seem like Silver suppliers. And then you get to sell the product and go through the customer service and dealer support, and then you'll realize that they are Bronze suppliers. Be careful and be wary of them.
If any of your suppliers start showing traits like these stories, avoid working with them. In fact, let them know that you're going not doing business with them anymore. It's for your 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'll end up spending all your days spinning your wheels, trying to figure out customer service as you fight back and forth with the supplier to get the customers taken care of. And literally, there's so much abundance out there.
There are so many great niches. Don't deal with a niche with suppliers that are like that. Only work with suppliers that offer great support. And if they don't sell as well, then that is what it is. Put your time and effort into building a new site out in a different niche with better suppliers.
One of the first things that have happened to us is this 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 tough and annoying to deal with because you have to spend so much time on the phone. Your time is valuable. As a marketer, you could be creating content, building a team, doing more marketing, improving your ads, or improving your website. You'll have your VA spending time on the phone, trying to figure out an issue when they have so many other things that need to be dealing with. It can be very tough, annoying, and time-consuming. It can really burn you out in the long run. If the supplier that you have, doesn't answer their phone consistently, you've to call them over and over and over again to get through. These few support agents they have would either have a bad attitude and treat you unfairly, or they just have no power to take action on your issue. Things like that are happening, and you have to drop them. You will literally pull your hair out.
The next thing that could happen, a supplier will not call you back. That is like the worst possible thing that any supplier can do. It happened to us. It happened to us multiple times. It's so strange because you're supposed to have a good relationship with your suppliers. You need a call back because you want to get taken care of right away. It's very childish. It's not mature. If your suppliers do this to you, take that as a sign. You need to drop them as soon as possible, even if their products are selling.
Somebody got into some issues we had with warranty and shipping damages with suppliers. When a product is defective, and the supplier requires it to be shipped back before a new one will be sent out, that's terrible support. If 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. It shouldn't tell the customer that they have to pay to ship the product back. If it turns out that it's actually defective, it literally takes two weeks to do that. Good suppliers will ship out a new product. And if it's even worth shipping the broken table leg back, then they'll provide a contact for that.
When it comes to selling electronics online, like computers or TVs or anything like that and you get a warranty or shipping damage issues. That's some of the worst possible stuff you can deal with because customers sometimes don't know how to use or are just learning to use it. Those niches are very dangerous. You're going to be pulling your hair out a lot because electronics are notoriously difficult to keep good quality control, especially when they come from China. A lot of times, these things are built in China, and a lot of shipping goes between all these things. Stay away from those things if you can.
When a product arrives damaged, and they require it to be shipped back before a new item is shipped out is just the worst possible thing. If that happens, you can tell your supplier that it's a bad business practice.
There are 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. This is because they lose a lot of their dealers all the time. They have to keep accepting anybody who will sell their product.
Sometimes, when a customer leaves a negative review on your website, the supplier gets pissed at the dealer and doesn't decide to help the customer. The supplier gets mad at the dealer for that. It actually happened to us when our customers left a bad review on the manufacturer's website, the supplier's website, and their Facebook page. They came after us thinking that we had left the review. I thought it was hilarious because they knew there was an issue with this customer. 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. If the suppliers ever act that way towards you, drop them immediately.
Your time and effort as a marketer are worth a lot of money. Don't let them treat you like that.
As far as warranty shipping damages, 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, has a good attitude, and works fast. There should be multiple people like that. That's how good suppliers work. That's the key to a good business. Look at Amazon. Their main issue is taking care of the customers no matter what. They continue to grow every day because they do that.
The last thing here is, warranty issues can take months to resolve. We've had issues that keep going in the product because of bad product quality. One thing fails, and the other thing fails or breaks. The other thing breaks while it's in the warranty period. And the supplier will go back and forth to the customer, and then we'll go back and forth to the supplier. It's just a mess, and it goes on and on. If you ever end up dealing with this kind of stuff with one certain supplier, 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 isn't nice in the long run.
Let's talk about return issues. Here's a story for you. It happened to us before that the product within the return policy is defective and beyond repair, or the customer is incapable of doing the repairs. The supplier does not want to accept the return and refuses the return, 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. It leaves the responsibility on the retailer or the customer to pay for it, for the call to ask for the return.
It's bad business. It's just bad business practice, truly. It's not a good brand building. It's going to turn into a lot of customer dissatisfaction, negative reviews, spam posts online, resulting from not taking care of customers when things go awry. If you spend a hundred bucks, whatever it takes to take care of a customer in the first place, quickly and effectively and efficiently, happily, respectfully, the customer will be a fan for life. They'll keep buying from that brand because we'll know no matter what, if the worst thing happens, they'll be taken care of. That's a 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. That's key.
It's good to know we have a policy that if anything takes just a hundred bucks or less to fix, do it. If it takes more than a hundred bucks, we're running to the spiral. 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 policy. 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 that the customer builds your brand. Understand that. Suppliers don't take their brand building as the number one thing in their business are suppliers you just don't wanna work with.
Bad suppliers might have packaging issues. And we've seen this a lot, especially with big products. FedEx and UPS charge oversize fees like crazy. If the product is big, the supplier might cut corners with the packaging in order to reduce shipping costs on their end. That includes buying cardboard boxes that are actually thinner than they should be. It's a big product. You've got to buy thick cardboard, but thinner cardboard costs less. 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 a freight truck, things can be jostled around inside of a free truck. If there's a lot of stuff to be moved from one freight truck to another along the route, that will end up in upset customers. It leads to more returns and expensive call tags, and negative reviews. It just goes down to a spiral.
If you have a product, your main product, and have one supplier that offers 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. They're cutting corners and costs. They're cutting corners and product quality. They're cutting corners and packaging. They're cutting corners and customer support. Be very wary of selling the cheapest products in your niche. Be wary of those suppliers.
Now, let's talk more about product quality issues. When you have a high percentage of the supplier's products arriving defective that can't be repaired, be very wary - either the products can't be repaired, or the supplier isn't willing to repair them or isn't willing to offer a replacement. If that happens more than a few times throughout your order, you have to drop them. If you keep them as a drop ship supplier in your store, it will diminish your brand name. It's going to diminish the referrals you get. Your business won't do as well because the suppliers that you have are not quality suppliers.
Number two. Products arrive with strange configurations that are obviously factory mistakes of the product. If the supplier doesn't go to China and check in with the factory and make sure they're doing the best quality possible, if there's like no management along the supply chain, be wary of that because it means they're cutting corners elsewhere.
Number three. Products aren't checked for quality control when they land in the supplier's warehouse from China. And this is key. A supplier needs to open the box, look at the product, look through, and make sure it's not like missing something and making sure it's not completely broken before they ship it out. They just get it, and slap a sticker on it and ship it. That product could have arrived completely damaged or misconfigured. And it goes on the drop ship dealer. The blame for that goes straight to the drop ship dealer who the customer knows or thinks that the product came from the dealer, not from the supplier. They don't understand the supply chain and drop shipping, which is OK. But it's the dealer now that gets the front.
When you have suppliers like that, you'll end up getting all the customer support issues. You're going to end up fronting the call's cost, 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. People will get mad. People get upset.
Another thing is that suppliers 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. Instead, they might reflect that the whole general line of the items that the item is in and it's just ridiculous is like the cheapest possible thing you could just do to offer better quality sport with your products is have a good product manual. Everybody looks for the manual when they first get their product. And this goes along with the next thing I want to talk about: the lack of marketing materials created by bad suppliers. And you want to watch out for this.
If you are researching suppliers online and cannot find any assembly videos for a product that requires assembly, be very wary. That means they're cutting corners in their duty as a supplier is to create sales videos for their products. If they want to sell a product, they're going to have to create a sales video. The bottom line is that video is the cornerstone of marketing in today's world. If they don't have assembly videos or sales videos, that's a big issue, and you should be careful of that. Take your time, film all those videos yourself, and then post it to your YouTube channel. That's a great opportunity for you, especially if you're into the niche.
If you didn't have to 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. You don't necessarily have to have the product with you to do a sales video. You could create a slideshow for free on Google Sheets, put pictures of their 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 your retail brand's quality very high, and you'll attract more these Gold suppliers. I recommend doing that.
If your product requires assembly, consider making a trip to the manufacturer's warehouse in any states where the products are and ask to see their showroom. And then go through the assembly process, one of our demo models, or just ask them if you can assemble one of them out of the box because that's a really good idea. But again, 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 and the marketing costs. And that means they're probably cutting corners elsewhere, too, especially if they have the cheapest products. The cheapest products show they don't have the 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. And 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 dealer, as a supplier, they're kind of your employer in a way. You're partners with them. 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. And it goes both ways. But if you receive really bad support from them and it's unfair to you across the dealer base, like they don't require the same thing that I do, that is a terrible supplier. Should not do business with that supplier.
First of all, that is illegal, and it's against FCF anti-trust laws. But secondly, it's just bad business practice, and it's really immoral, and it's actually happening to us. And the crazy part is we have to deal with this in real life. This isn't like I'm just making this stuff up. Like all these things will happen when you deal with crappy suppliers because we have one main supplier that gets the lion's share of our sales because they offer the cheapest products, and people are always looking for the cheapest, best deals, right? We have to deal with competitors that are always offering coupon codes. So it's tough because now there's a race to the bottom on the cheapest products with the suppliers that provide the worst support possible. You're making zero profit, and you have to spend all your time with crappy customers.
When you sell cheaper products, you get the worst customers.
It's a race to the bottom, and it's a race to the bottom in your life as well. You don't spend your time learning and your marketing skills. You spend your time dealing with support issues. And you are literally pulling your hair out when this happens.
If they come at you on your website, they're going to tell you, "oh, you know, you have a coupon on your site and yet take it off, or we're going to, you know, stop your dealer agreement or whatever." And 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, check a week later, and they still keep it on their site. That's crazy, right? Never work at those suppliers.
Number two, if the supplier has an issue, they use their motions 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, then that's really, really bad. You don't want to work with anybody that makes emotional business decisions. Businesses are rational things 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, you just don't wanna deal with it. You'll be pulling your hair out.
Number three, if the supplier is an inconsistent inventory. Items that are always running out of stock or the stock on the dealer portal. 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? I mean, literally is an unprofitable business model. So 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, they order enough ahead of time or give you a heads up like, "Hey, we're running low on stock. Might want to lower your ads. 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. They'll just have a dealer, and they will not care. This is happening to us. It's tough to deal with. It's annoying. And we are 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 you don't have to discount the prices to compete when it comes to marketing. 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 product's sales price because the product's sales price is 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 didn't get discounts when they paid more money. They don't think you're getting scammed. They think they're dealing with a quality retailer, and they don't get crazy. It's just how psychology works. Humans are so crazy like that. We are emotional beings. If you avoid offering coupons and you do way better with marketing and free gifts, you'll win in multiple ways than one. But suppliers that don't enforce that and they accept anybody that applies in all these new people have coupons, just like the work suppliers to work with.
Number five in the last one with the dealer\s support. Like I said before, with the Bronze suppliers either takes a long time to get hold of or have a bad attitude to work with or can't do anything on their end. They have to wait until the person who's the manager, who has the best attitude, usually decides on it. That person might take a whole day or two to make that decision while your customers are waiting for a resolution for their issue.
That's a pain in the ass, from a retailer's perspective. You're relying on them for support, and when they're terrible support, you have to just give that person a call tag and a refund. That could be very costly instead of making one hundred dollars profit on that sale. You lose one hundred dollars, and you lose the time that you spent dealing with it. That is a huge headache, and it's an unprofitable way to run a business. Those are the deepest part issues that we've been having with our biggest brands that sell cheap products. And you just don't wanna work with these brands. Honestly, it literally will end up in you pulling your hair out, and you have way better things you can do with your time. You can learn to be better marketing, a better salesperson, or build sales funnels online. There's so much abundance out there. You just don't want to waste your time with those suppliers.
Let's talk about the suppliers that cut dealers out.
Number one, they don't refer business to online retailers. Instead, they even sell directly 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, and even sell under the price that is your listed map prices? I've had this happen before, and it's just crazy. It literally makes the niche completely unprofitable or the supplier's products unprofitable, and 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 spending all your time. I mean, if anything, that's a good lesson learned. A good lesson in marketing and customer service and sales.
That's it. I hope you got something from this. Never work with bad suppliers. If they're showing signs of being a bad supplier, drop them. Look for another one. It will save you time and money.
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Have a nice day. Take care.
eCommerce Paradise was created by Trevor Fenner of Seattle, Washington in 2015 to help you, the entrepreneur, to start and scale your own eCommerce business selling high-ticket products online with the drop shipping fulfillment method so you can make more profit per sale, have a sustainable and evergreen online business, get started with very little upfront investment, and live a location independent lifestyle. Trevor owns multiple 7-figure High-Ticket Drop Shipping eCommerce stores and is a digital nomad, traveling the world while working remotely with the help of his team of over 10 virtual assistants from around the world. Trevor is currently located in Bali, Indonesia. Trevor is also a passionate skateboarder, surfer, scuba diver, photographer, environmentalist, outdoorsman, fitness and tattoo enthusiast.
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