Your supplier will indirectly determine the quality and price of your products. A bad supplier can destroy your credibility. On the other hand, a good supplier will increase the value of your business. It’s therefore essential to choose carefully.
What are you looking for ?
You’ve spotted a great opportunity and you want to have your product manufactured from A to Z. It’s important that, before you start your search, you decide what type of suppliers you’re looking for.
There are several options:
- A manufacturer that can bring your product concept to life.
- A supplier that proposes a wholesale offering for brands and products that already exist.
- A dropshipper to supply products and manage orders of existing products and brands. Dropshipping is a good solution if you don’t have sufficient financial resources or a large enough warehouse.
Suppliers from belgium, europe or elsewhere?
One important question you have to answer before starting your search is if you want to obtain supplies from Belgium or another country. You probably already know that it’s generally less expensive to obtain your products from other countries (in Asia for example), but there are other issues to take into consideration before making a decision.
Supply from national or European sources will ensure better working standards and better manufacturing quality. You will also have a marketing advantage due to the fact that your products are manufactured in Belgium or in Europe, a detail which is increasingly appealing to consumers. Delivery times will obviously be shorter. On the other hand, manufacturing costs will be higher and the choice of products smaller (some items are no longer even manufactured in Europe).
With respect to obtaining supplies from another country (primarily in Asia), manufacturing costs are lower and there is a very long list of manufacturers to choose from. On the other hand, working standards are often neglected and products are of lesser quality. Note that if you want to manufacture a new product, you can expect very little intellectual property protection and your idea will not be safe. Communication can also be more difficult, because not all suppliers speak English well. Delivery times will be longer and prices higher and remember that there are customs procedures for importing and exporting.
Where should you start ?
Now that you know what you’re looking for, how do you find your future suppliers?
The following methods can be used:
- The Internet will be your best asset. Be sure to use the right keywords in the search engine (e.g.: “suppliers/wholesalers + type of product sought”) and to test different keyword combinations. Be careful because many supplier sites are not very optimised and won’t appear in the first searches. Don’t rely on the quality and design of their website either. This aspect is often neglected by wholesalers who are much less concerned about customer reactions than retail sellers.
- Use online BtoB directories. These directories contain thousands of suppliers who can appear to be a magic solution, but be careful, many of them are not kept up to date. In Belgium and Europe you can use the following, among others: Kompass and Europages and in Asia: made-in-china.com and Alibaba.
- Trade shows for professionals only can also be a way to make contact with suppliers. However, before booking a ticket for a trade show, make sure that the investment will be worthwhile by doing some research on the companies attending.
- Referrals: some of the best partnerships start with a referral from someone you know or from another entrepreneur.
How to contact suppliers ?
How will you approach a supplier, once you’ve found them?
Whether by email or by telephone, the first contact is important. Here are a few essential questions you should take into account:
- What is the minimum order quantity (MOQ)? Make sure that this minimum works for you and that you have the financial means to invest. The minimum order quantity can vary significantly depending on the product and the supplier. Although this aspect is often negotiable, you will need to address the issue question up front.
- How much does a sample cost? Ordering samples before putting in a complete order is still the best way to check product quality. The price of samples will also vary depending on the product and the supplier.
- What is the production cost? One of the most important questions you will have to ask is: “how much will product manufacturing cost?” You should probably ask for pricing for several quantities to get a general idea about prices. If you order large quantities of product, the cost price per unit will be lower.
- What is the manufacturing time-frame? It’s very important to know how long it will take to produce your order. Depending on your business sector and your customer’s profile, this criterion will have an impact on your quality of service.
- What are the payment terms and conditions? A number of suppliers will ask new companies to pay for the full order in advance. This is an important point because inventory can be a significant cost for start-ups.
Suppliers receive an enormous number of requests from buyers who are just shopping around. It therefore isn’t unusual not receive an answer from them. To ensure that the odds are in your favour, avoid writing overly-long emails and get straight to the point. The first email you send to the manufacturer must be clear and precise. Avoid saying too much about yourself and your project. Also avoid referring to a small first order. If you request an estimate for an amount far below the minimum order, you may not get an answer. Which is why it’s important to ask about minimum order quantities first. One last piece of advice: contact the supplier in their own language or in English.
When should you get started?
Start your search from the beginning of your project, i.e. when you start to prepare your company or business plan. A significant portion of your expenses will depend on the suppliers. Which means that it’s important to include them all in your financial plan.
Many suppliers will refuse to provide information if you don’t have a company number. First try to negotiate to obtain the product catalogues and price lists by explaining that you’re in the process of creating your company and that you’re looking for a long-term partner.
How can I know if the supplier is reliable ?
You can use the following criteria to check the reliability of a potential supplier, be sure that they meet your requirements and that they offer a good quality price ratio:
- Is the supplier easy to contact? Test the supplier to see if they can be easily contacted by telephone or by email. If it takes a supplier several days to answer you each time and is not very responsive, that already means that there is a problem with reliability and speed of service.
- Can the company be trusted? Check if the company is legitimate and when it was created. That will provide some information about the supplier’s experience and will ensure that you don’t get scammed.
- What are the terms and conditions of sale? Read the terms and conditions of sale carefully to avoid any misunderstandings in the event of a future collaboration. If the supplier’s terms and conditions of sale are not written down, check that all of the important information is in the contract or request the addition of missing information (e.g.: payment time-frames and methods, delivery times, return procedure and procedure to be used in the event of defective merchandise).
- Does the supplier provide after-sales service? A good return policy for damaged parcels is essential, all the more so if you will be using dropshipping.
If the answers to these questions aren't clear or if the contact person doesn’t provide a complete answer, draw the conclusions and look for other suppliers.
Lastly, the final method to check product quality and the professionalism of the supplier is to trial run the partnership. If you have the time and financial resources, put in a small order and request some samples. That will enable you to check the speed and reliability of the supplier, the product quality and the delivery service.
As you are now aware, it takes time to find a good supplier. By using the method presented above, you’ll put all the odds in your favour to build long term, trust-based partnerships.