I’ve been on a Trade Show mode the last few days and was thinking about the some of the things to ask when evaluating a new wholesale supplier. Whether sizing up new suppliers at trade shows or during the regular course of your home business, it’s important to ask a few key questions. With that in mind, I came up with this list. As always, I approach things from a home-based business using a drop shipping business model.
- Minimum Order – Ask about a minimum order. This is especially important to a home-based business because you probably don’t want to stock any product if you can help it. If they do have a stated minimum, inquire as to how strict it is. Sometimes wholesale suppliers will ship less than minimum and tack on a fee for doing that, but this isn’t always well advertised. Ideally, as a non-stocking home-based business, you’ll want to buy below minimum and sometimes even with a fee, you can make good on it.
- Drop Ship – If they don’t have a minimum or they will ship below minimum, it probably means they will drop ship. But it pays to ask them specifically about drop shipping.
- Lead Time – Inquire about their lead time. That is, how long is it from the time you place the order with them until they ship the product to your customer? The shorter the better.
- Return Policy – Find out who gets product returns. In most drop shipping arrangements, the product goes back to the business not the shipper. You’ll want to be clear on this up front.
- Payment Terms – Find out about accepted payment methods and terms. If they accept credit cards, which ones do they and don’t they accept? Do they offer net terms?
- Product Images – If you’re selling on the web as your home-based business, few things are more important than the product images. You can always write your descriptions (in fact, you should), but it’s hard to come up with product images if the supplier doesn’t have them. Find out if they have images and if it’s ok to use them.
- Product Updates – Find out if the vendor offers their product database via download or email. This is important when you sell a lot of products on the web in a drop shipping arrangement. It’s difficult to keep track of the supplier stocking levels, so the best arrangement is when they can provide the data to you in a format you can automate (such as a CSV file).
- Shipping Constraints – Are there shipping companies they favor or shipping companies they will not use? Will they ship to your customer if they only have PO Box? These are the kinds of shipping issues you will need to know before doing business with any supplier.
How about you? Do you have anything to add or comment on? Comments are open and welcome on this blog.
For more information on how Drop Shipping is used in a Home-Based Business, see my previous posts: Jump Start your Home Business with Real Drop Shipping and Drop Ship Scams.