Running an online shop: Finding suppliers

March 15, 2011

When I wrote my recent article about finding a niche for your on-line shop, I asked if people would be interested in more similar articles and I got a really positive response. So here’s the next article!

I figured the next stage after finding your niche, is finding appropriate suppliers. This can be very difficult if you’re looking to stock unusual products that aren’t commonly available. If your chosen products are hard to find in the marketplace (which is probably one of the reasons you’ve decided to stock them), then you may struggle to source them too. The problem is exacerbated by the fact that for some reason – I haven’t been able to work out why – many wholesalers and distributors just don’t have a website, so finding information about them can be difficult.

Here are 8 top tips for finding suppliers, based on my experience. For obvious reasons, there’s a bias towards the sewing industry, but most of the tips are relevant to any online shop.

1. Know Your Craft – read forums, blogs, and become an expert

This might sound obvious, and I made the same point about finding your niche, but it really helps to become an expert in your field to know where to find your suppliers. You will become familiar with the brand names that you want to stock, and will come across new and upcoming products before anyone else. Make sure you follow the blogs of people you would classify as your target customers, and/or that write extensively about your field. Also frequent forums (such as the Sewing Forum and Crafteroo); it might even be worth visiting US forums to see what products they have over there that we don’t have yet in the UK.

Once upon a time, Colette Patterns were only available from the US and because I had done lots of research online reading sewing forums and blogs, I knew there was a lot of demand for them, and so my company Sewbox became the first UK stockist of Colette Patterns. There are now of course lots of UK shops stocking them, but being first really helps build your brand and profile as people will come to your shop to buy instead of having to buy from the US. Sewbox was also the first UK stockist of Hot Patterns, and because I managed to build up such a strong reputation and good volumes before other shops started stocking them, it has been difficult for other online shops to create a similar offering. So being first is really helpful.

2. Don’t be Shy – Use the Phone

Don’t be afraid to phone and ask, ask, ask! You’ll be surprised how helpful people will be, after all, they want your business and will be eager to build a good relationship with you and to help you on your way. Even if you don’t have any suppliers in mind yet, you can start by phoning some established wholesalers or distributors you are aware of, or suppliers of similar products. Tell them what you’re looking for, whether they stock this, and crucially, ask them whether they’re able to give you any pointers in the right direction. I found out a lot of information about potential suppliers by phoning companies that weren’t able to help directly, but had contacts that they were happy to pass on. You may also be lucky enough to speak to people who know a lot about your industry and may be willing to pass on a lot of information. Don’t be afraid to ask cheeky questions either – the worst they can do is hang up on you!

It’s a good idea to phone instead of e-mail, when you can, for a couple of reasons. Firstly, it is so much easier to find out extra information this way. You can ask additional questions based on what they say, which is easier and quicker than a whole series of e-mails going back and forth. Secondly, and perhaps slightly controversially, it is a lot easier to get truthful, “insider” information this way. If you send an e-mail, people have more time to think and formulate an appropriate response. If you speak to someone on the phone you’ll be able to tell by their immediate reaction what they think about a certain company, and they might give you extra information they’re not strictly supposed to indulge (e.g.: “wholesaler XYZ like to think they drive a hard bargain but make sure you negotiate, they’ll give a little extra then”). Finally it just adds a more personal touch and it’s important and helpful to build good relationships with your suppliers.

3. Search online

If you have identified your niche but aren’t yet aware of suppliers in this field, you’ll have to work a bit harder to source them. Try googling <<YOUR PRODUCT>> “wholesalers”, “wholesale suppliers”, “distributors” and see what comes up. It’ll be a bit like searching for a needle in a haystack to find your golden suppliers, but it’s a potential starting point if you’re really stuck. Keep searching using really descriptive keywords for your product to see what comes up. Try googling “how can I source <X>?” and similar permutations.

4. Join Linked In

Linked In has some really useful business groups that may help you find your suppliers. For example they have various textile groups (e.g. Textile Sourcing) that have lots of different distributors and wholesalers as members. Join them, ask questions, get to know the group. A word of warning though: you are likely to receive lots of soliciting messages, and it will be difficult to gauge the quality and reliability of your contacts so make sure you do extensive research before entering in to any agreements.

5. Bricks and Mortar Shops

This might be bit controversial, but don’t be afraid of going in to bricks and mortar shops and having a cheeky look round to see if you can spot who the manufacturers are of products you like. Many dressmaking fabrics contain manufacturer / design information on the selvedge, and this is how I first found out about John Kaldor dressmaking fabric. I also looked around a rather well-known, upmarket haberdashery to spot their more unusual products and of course, they almost always have some mention of the manufacturer on them. This can give you some great leads!

6. Trade Shows

The Trade Shows are absolutely essential for staying on top of what’s happening in your industry. You might not find the more unusual products here, but you’ll get a great feel for what is happening with other retailers, and what avenues they’re pursuing. Importantly, you’ll also meet lots of new contacts which is always useful.

The key trade show for the craft industry is Craft, Hobby & Stitch International, held each February at the Birmingham NEC. A useful fabric exhibition is the Textile Forum, held quarterly on South Molton Lane.

7. Get it manufactured!

If you really can’t find a supplier for a product you want to sell, but you’re convinced there’s a market for it, why not get it made yourself? The Linked In groups might be a useful starting point for making contacts.

A good example from my own experience was trying to source dressmaking fabrics with border prints: I knew from research and my customer knowledge that there was demand for them, but it is still quite a small market, and suppliers find it a risky area as if they get it wrong, they’re stuck with distinctive prints they can’t shift. I couldn’t find a good, reliable supplier with a decent range that was willing to supply in relatively small quantities. I started to investigate the possibility of getting some border prints designed and printed exclusively for my company, using contacts I’d developed on Linked In; this project has been shelved as a result of my hectic family life, but there’s an opportunity here for someone with the time and resources!

8. Familiarise yourself with the terms of trade

Once you have found potential suppliers, make sure you are familiar with their terms of trade before you sign any sort of agreement. Some common things to check:

  • What are their minimum order sizes?
  • What are the payment terms? If initial orders are on a pro forma basis (i.e. paid for upfront), at what stage will they consider a credit account?
  • If you are buying from outside Europe, are there any customs charges you will need to pay? Don’t rely on information from your supplier, check the regulations. The UK import tarriffs can be found on the Businesslink website here.
  • Are shipment charges included? (usually not, in which case make sure you work out how much shipment will cost as it could make a big difference to your profitability).
  • Who is responsible for the goods during shipment, and how will the costs and risks be divided between buyer and seller? Will the goods be fully insured or are you responsible for taking out insurance? You might come across terms such as “Ex Works” or “Free on Board”. Another useful BusinessLink tool for finding the right classification can be found here.
  • What are your rights when it comes to returning goods? What are the procedures for returning faulty goods?

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I hope my tips on how to find suppliers for your online shop have been useful. Next, I intend to tackle the subject of pricing. Is there anything in particular you’d like me to cover? If so, please let me know.

 

 

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