When you want to start in e-commerce, turning to dropshipping is a real opportunity. This activity allows you to take your first step in the entrepreneurial adventure without taking too many financial risks.
As a reminder, in this type of distribution, you put products on sale online with your prices and once the transaction is initiated, the management of the delivery is operated by the supplier. You sell without stock but you are in charge of the management of your e-commerce business.
However, to carry out this project, the choice of suppliers is essential. It is on this commercial partner that your success will partly depend, through the quality of its products, the prices charged and the delivery carried out.
Your choice will therefore depend on the types of products you wish to sell, the niche you intend to target, but also on the reputation of the supplier. It is better to surround yourself with quality distributors who are already well known in their field!
What is a supplier’s job?
A supplier is a partner who provides services or goods to its customers.
The products and/or services offered by suppliers may be intended for resale (in the case of trading activities) or for processing (in the case of a supplier of raw materials, such as food distributors).
The supplier is a service provider who is perfectly integrated into the company’s production cycle. It replaces part of the salaried workforce.
It allows the company to add key competences that it does not have internally, without being burdened with a fixed and recurring charge.
The supplier can also be integrated into the production tool, by bringing tangible assets to its customers. For example, he can be the supplier of the machines which are used to design the finished products.
Whether they provide the company with means of production, raw materials or finished goods, suppliers are a key element of the company.
Maintaining a good relationship with him is essential: the information, contracts and business agreed between the two parties must be fluid, transparent and the relationship must be based on trust. Similarly, ensuring that the supplier has a rigorous production and good logistics will help avoid stock-outs or supply problems.
The supplier is an external service provider of the company that has a direct impact on its added value.
As a true expert in distribution, his knowledge of the product, of the articles sold in his sector and of the companies in the market can help you in your journey, a precious support if you know how to surround yourself with professional distributors. It is therefore best to choose a reliable, serious and rigorous partner.
The relationship established between the company and its supplier is the subject of a contract. It is governed by general sales conditions, which stipulate pricing conditions, specific guarantees and payment terms. This contract between the customer and the supplier can be subject to recurrent negotiations.
For example, if the customer reaches a certain volume of orders, he may have to negotiate a certain type of discount with his supplier.
In e-commerce, having a good supplier strategy saves time and money. In the long run, it also allows the e-merchant to devote himself more fully to his activity and to make his customers benefit from more advantageous offers.
A good customer-supplier relationship is therefore a major factor of growth.
What are the types of suppliers?
For his e-commerce activity, the entrepreneur can use different types of suppliers. They can be retailers, wholesalers, central purchasing offices or service providers.
The retailers
The retailer is a professional who finds and buys products or services from several suppliers. He groups them together and sells them to companies or individuals. His main advantage? The retailer has a wide variety of different products and services. On the other hand, his prices are often higher than those of a wholesaler.
Generally, the retailer buys his products from another supplier, a wholesaler, an importer or a producer. He then resells his articles in a store, a traditional store, or by mail order, via a catalog or an Internet site.
The wholesalers
The wholesaler is specialized in the wholesale trade. He practices particularly advantageous prices, provided that he can sell his articles in important quantities.
Regularly placed as an intermediary between producers and retailers, the main advantage of the wholesaler is to reduce logistics costs and unit costs.
The buying groups
The buying group is a structure that manages the purchases of its members. Its customers can be retailers or wholesalers. The buying group will process all the orders of the different customers at the same time in order to benefit from advantages.
For them, the buying group carries out product studies, supplier searches, price negotiations or documentation requests. The buying group is bound to its customers by a contract.