How to Pick Suppliers for Profit
By Joanna Bradshaw
Whether you are a flea market vendor just starting out or are looking for trending products, there are many ways to find suppliers and elicit their help to build your business and profitability. The first step is to review the various distribution channels, their strengths and weaknesses, and consider which should play a part in your store.
Basically, there are several types of suppliers. These include manufacturers, marketers/manufacturers, distributors, wholesalers, jobbers, importers and craftspeople.
Manufacturers design, create and sell products to vendors through their own sales force or have distributors or agents. This is usually the cheapest way to procure goods, although the minimums and freight might be high.
Marketers/Manufacturers design the line to sell to vendors, but they mainly create and subcontract brands. This can add distinction to your assortment.
Distributors and Wholesalers buy from the manufacturer and resell to vendors, often from elaborate showrooms. They are usually compatible, so you can find complimentary merchandise and consolidate several lines, saving freight and garnering concessions.
Jobbers generally specialize in closeouts and can be useful in adding promotional spice to your business.
Importers buy and sell foreign goods that are unique and often less expensive than American-made products, which can help differentiate your business.
Craftspeople produce their own wares and can add an air of exclusivity to your assortment.
Some of the best avenues to find suppliers include:
- Shopping the competition
- Trade and crafts shows
- Trade publications
- Trade organizations or buying groups
- Other vendors
- The Web
Start by analyzing your suppliers
Determine who is your biggest supplier and why. Is it because of product, pricing or service? Chances are it is all three. While the most important single criterion is the product and its appeal to your customers, pricing has to be fair in relation to the product and its competition. If the product has brand name recognition that can enhance your customer’s view of your booth for quality or fashion forwardness, this provides added value. The consistency and quality of the product is also of great importance.
The service you receive is also crucial and there are many factors to consider. These include product availability, complete and on-time deliveries and product marketing. Other elements to consider are whether or not a supplier offers demonstrations, sales meetings or closeouts, or pre-tickets or counts your merchandise. If a supplier offers special terms or allowances, this is a plus. Examples include discounts for cash payments, large quantities, opening orders or a promotion, and allowances for advertising, guaranteed sale or prepaid freight.
Finally, one of the most important areas suppliers can add value is by sharing their understanding and insight into the business. Most suppliers, especially manufacturers, know a tremendous amount about their business and are more than happy to answer questions about it.
These are all considerations when evaluating the effectiveness of your suppliers, and they can help you identify who excels and which are in need of improvement. Remember, your merchandise is only as good as your stable of suppliers.
Joanna “Jody” Bradshaw served as a senior merchandising executive in Bloomingdale’s, Macy’s, Simmons, and Abraham & Straus. Later she co-founded HØME Ltd., served as GMM, SVP for Dansk International, and was president of two Tiffany specialty chains, Conran’s Habitat and Workbench, before starting her own consulting firm. The author’s first book, Jody, chronicles her more than 45-year career and her second book, Be a Millionaire Shopkeeper, reveals the tricks of the trade to help small business owners increase sales and profitability.