Dropshipping is the perfect answer to the e-commerce retailer. There is no inventory, no need for a warehouse, and no risk of goods you can’t sell off. However, finding the right supplier is vital to its success.
You need a supplier who gives you exactly what you paid for, offers timely delivery, and is reliable. That can be a hassle, but what if sales grow so much that you must handle multiple suppliers simultaneously? How do you figure out how to manage them without mixing things up? How do you know when you need to onboard yet another supplier?
These are questions we will delve into in this article. Let’s dive in.
A Breakdown of Single Supplier Strategy
Single-supplier sourcing is using one major supplier for all your dropshipping needs. It can be a brilliant strategy since it focuses on building trust and a solid relationship with your preferred drop shipper.
That is a good deal if you find a reliable supplier who understands the customers’ needs regarding timely delivery, quality, and packaging and can save you a lot of time in the long run.
The only drawback to this method might arise if your chosen drop shipper does not have multiple locations for proximity to your different customers or if they cannot handle the rapid increase of your store orders.
A Breakdown of Multiple Supplier Strategy
Multiple Supplier sourcing uses more than one supplier to meet rising dropshipping needs. It might become necessary for your online store once it becomes more expensive, and it becomes more challenging to operate without them.
Multiple Suppliers require a higher level of management, as it can become quite difficult to manage different order prices, locations, company policies, etc. It usually requires a management system to track records, service the relationships, and track the order processing.
However, one significant advantage is that you do not have to worry about being disappointed since you have multiple options.
When will I Need More Than One Supplier?
How do you figure out when you need more than one supplier?
If you are starting dropshipping, it can be best to work with one trustworthy source, but there are instances in which using multiple suppliers helps. They include;
Inventory Management Difficulties
If your supplier is unable to meet up with your demand consistently, then that is a signal that you need another supplier. In this case, having multiple suppliers helps you distribute your inventory among various sources, reducing the risk of lost sales or stockouts.
Price and Negotiation Leverage
Collaborating with numerous suppliers gives you bargaining power when negotiating prices and terms. You can use estimates from one supplier to negotiate better prices from another, lowering your overall costs.
However, note that this is only advantageous when your orders are tangible, as signing contacts with multiple suppliers can incur more costs initially.
Geographical Considerations
Relying solely on a single supplier who lives far away from your customer base can lead to prolonged shipping times and unhappy customers, especially if you’re selling to a worldwide market.
Having suppliers spread across multiple nations enables you to offer your target customers faster and more affordable delivery options.
Evolving Business Needs
The requirements of your dropshipping business will evolve as it expands. You might ask for faster shipping, access to a broader selection of goods, or specialized services. A multiple-supplier strategy allows you to adjust your purchasing to accommodate changing demands.
Product Diversification
If you decide to add a completely different product to your online store offerings, there’s a high probability that your current supplier will not offer these new products. In this case, onboarding another supplier to meet your new product needs becomes necessary.
For example, while Globabllyfulfill would be great for all your clothing needs, if you decided to add stylish wardrobes to your catalog in response to customer demand, you would need to source it from a supplier who is a wood maker or one who sources directly from the best wood makers.
It is also necessary when one supplier cannot meet your product needs. For example, if one product has different components, it requires different suppliers.
Benefits of Using Multiple Suppliers
If your needs fit into those listed above, you would be better off with another supplier. Here are several benefits of using multiple suppliers.
Quality Control
If your brand’s image emphasizes quality – you should conduct a more thorough quality control process by working with multiple suppliers. Before signing a contract, you can evaluate product samples and compare the standards from different sources.
Although thorough research can prove exhausting, giving your customers the best is vital. Multiple suppliers usually have different sources for their products, and having more than one at hand gives you a wide range of different products to choose from.
Reduced Supplier Dependence
Strong relationships are valuable. They are what you should aim for while building your business. However, a multiple-supplier strategy gives you independence from a single supplier and empowers you in negotiations.
The fact that you can source your products elsewhere allows you to walk away if the supplier does not meet expectations. There’s also the fact that your supplier might run into unplanned hassles. It helps you to avoid losing a sale because of unforeseen circumstances.
It is better, though, that this is not the only reason you are using multiple suppliers, as you might incur more significant costs if you do not have large orders to offset multiple contracts and other fees.
Improved Overall Customer Experience
Customer Satisfaction is the reason you run a business. That is because customer satisfaction leads to a better brand image, and an excellent brand image leads to customer trust, which leads to sales.
This means that your supplier choice must rely heavily on what leads to higher customer satisfaction. For example, customers like to choose from a wider selection. Multiple suppliers mean you have different sources and can cater to individual preferences and styles.
Furthermore, if you have multiple suppliers in different locations, your customers receive their products within a shorter period. That would lead to a positive shopping experience that will keep your customers coming for more.
How Can You Handle Multiple Suppliers?
Deciding to use multiple suppliers for your online store will provide numerous benefits. However, managing these partnerships effectively is crucial to avoid letdowns and mistakes that affect your ability to satisfy your customers.
Multiple suppliers require organization, clear communication, strategic planning, and some tech finesse. Here’s a guide to help you successfully handle multiple suppliers.
Build Strong Supplier Relationships
Selection Process: Don’t just go for the cheapest option. Research potential suppliers and evaluate their product quality, shipping times, customer service responsiveness, and minimum order quantities (MOQs).
A reliable supplier will save you a lot of heartache, stress, and cost. Look for a dropshipping company that doesn’t make you worry about things they should take care of. You can find them through reviews and by asking questions of other e-commerce retailers who have more experience than you do.
Clear Communication: Establish clear communication channels with each supplier. Tell them what you expect regarding order processing timelines, product information accuracy, and quality control procedures. You can also use project management tools or supplier relationship management (SRM) software to streamline communication and track orders.
Streamlining the Ordering Process
Centralized Ordering System: Tracking order placements and inventory from different suppliers using only a spreadsheet can get overwhelming. Explore ecommerce software and dropshipping automation tools to find the one that aligns with your budget and integrates with multiple suppliers.
That allows you to manage orders from a single platform, simplifying order placement, tracking, and inventory management.
Standardized Order Templates: Create standardized order templates that clearly explain product specifications, quantities, shipping instructions, and any specific requirements for each supplier. This maintains uniformity and reduces errors during order processing.
Maintaining Data Accuracy and Product Consistency
Supplier Data Management: Ensure that the supplier data you have on your dropshipping software is accurate and consistently updated. This includes product information, pricing, stock levels, and shipping details.
The data influences the product descriptions you give your customers while helping you choose which supplier is ideal for an order.
Quality Control Measures: Request for product samples from new suppliers and conduct spot checks on incoming shipments to ensure the product quality meets your standards.
Consistent Branding: Even while working with multiple suppliers, your customer shouldn’t get a varied brand message. Use consistent product descriptions, images, and branding across your store. This creates a professional image for your brand and avoids customer confusion regarding product variations.
Build Long Term Relationships
Managing multiple suppliers will have a lot to do with you. If you want a reliable supplier, you must also ensure they can trust you. Make your payments on time, be clear about what you require, and have a partnership mindset.
You can also explore co-marketing initiatives by combining products from different suppliers into one package. Remember, the goal is to get the best from your suppliers and customers.
The Right Suppliers = Greater Brand Image
That means you must invest much effort, considerable cost, and careful research to get the best suppliers. A great deal rests on how you can combine and maximize each supplier’s strengths.
So, utilize this roadmap to figure out when you need more suppliers, what you need them for, and how to effectively monitor them for maximum results. And remember. Take advantage of your multiple suppliers to get an edge in your negotiation. Best of luck!
