5 Questions you Must Ask Your Supplier

Dealing with suppliers is an inevitable and regular task for all online retailers. Most of the time, finding a supplier means the beginning of a successful and long-term business relationship. However, too many new sellers dive right in to using a new supplier, without doing a bit if research first.

Don’t even think about placing an order without first asking these 5 crucial questions:

1. Are the prices advertised on your site the prices I will pay when bulk-buying?
   All too often, buyers are put off by suppliers because the prices quoted on their site don’t add up with what the same items are being sold for on auction sites. The problem is the majority of suppliers do not advertise their wholesale prices on their websites.

   I know it seems strange that they would do this; after all, wouldn’t they want to attract new clients by showing their lowest prices possible? But suppliers operate purely on a volume basis; they rely on their clients to buy in large quantities to make a profit. Therefore, they price all their orders individually based on how much their client is spending on their order.

   So before you go deciding that supplier’s prices aren’t viable, email them and get a personalized quote.

2. Do you require a Reseller’s License/Sales Tax ID?
   Many US based wholesalers will ask to see your Reseller License before they will deal with you. This is because suppliers need to know that you are registered to collect sales tax, and may record your tax ID.

   Also, suppliers get enquires from many new and aspiring eBay sellers every day. Quite often, these clients will set up an account with the supplier, then fail to ever place an order. By asking for a Reseller License, a supplier can determine whether you are a serious business owner.

   If you are based outside of the US, and importing from a US supplier, you won’t need to worry about a Reseller License, as no sales tax will be paid.

   If you don’t have a tax ID, or if you aren’t quite sure if you need one, I wrote a really useful blog on how to get a tax ID. Check it out as tells you everything you need to know about how and what you need to get one.

3. Do you offer drop shipping services?
   Suppliers offering drop shipping services can come in very handy. You can either use it as your primary or secondary sourcing method, or use this service to check out new niche markets without having to risk investing in a new item or product line which may not sell very well. One thing drop shipping allows you to do very well is complete market research, risk free!

   Make sure you talk with your supplier about any extra charges that you will incur when you use their drop shipping service.  There are plenty of drop ship suppliers out there who will not charge you an account set-up fee or something similar, but some do.

   Also ask your supplier what drop shipping extras they can offer such as item photos and descriptions that you can use in your listings.

4. Do you have a MOQ?
   MOQ stands for minimum order quantity, and represents the minimum order a supplier will accept. Suppliers have MOQs because they make very little profit per item, and therefore rely heavily on volume sales.

   Some suppliers have no or very low MOQs which require you to spend only $100, for example. While this is great for many newer sellers who do not have a huge amount of capital to invest, it does mean that you will be paying more per item than you would if you were dealing with a supplier with a $1,000+ MOQ.

   Sometimes MOQs are quoted in units, so for example, you must buy 20 handbags, or 50 T shirts to meet the supplier’s MOQ.

5. What is your returns policy?
   Before you go placing your order, make sure you find out about your supplier’s return policy. It can be a bit of a nightmare when you order 150 units of something that shows up and is defective, or the suppliers gives you the wrong colors or sizes. Most suppliers will have fair returns policies that work in your favor, but some suppliers such as liquidators have a no-returns policy.

   Which question have you skipped when approaching new suppliers?

   About the author: Alice Delore is a copywriter for SaleHoo Wholesale Directory. She also regularly publishes on the SaleHoo Blog.