Set up your shop
How to find suppliers for a retail store
31 October 2022
MY RETAILER TOOLBOX
Download the document to have the brand prospecting file: One of the best ways to run a successful retail store is to find a network of reliable suppliers. When you are sourcing products for your store, you have to work with suppliers who you can rely on, and who won't let you down. Consequently, you should take your time finding the suppliers that are most suitable for the kind of business you are running. Your suppliers, also known as wholesalers, are key to you being able to meet customer demand and sell more products in order to manage properly your retail logistics.
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What kinds of suppliers are there?
There are several different kinds of suppliers, and those you choose to work with all have different strengths. You may be a small online store that only needs the services of a supplier with minimum quantities, such as Ankorstore, or you may run an operation that requires a large manufacturer.
These are the main type of suppliers for retail shops:
Manufacturer – when you need to purchase custom-made items, you should be talking to a manufacturer. They will work with you to produce a product that fits your brief and can be adjusted during the development process.
Wholesalers – these purchase goods in large quantities and sell them to retailers. They buy in large quantities at reduced prices and often require big orders to keep the prices low.
Dropshippers – dropshippers store your goods and sends them out for you. This method of retail selling saves on transport and delivery costs, but you will not actually see the products, which could be a disadvantage if you have customer queries.
Supplier sourcing strategies
The supply chain begins by finding quality suppliers you can trust and who will offer an efficient service. A successful partnership with suppliers is key to providing a consistent supply of products for your retail store.
You may decide to contact suppliers who have been recommended, perhaps by other companies in your network, or you can search for suppliers by researching online.
When selecting suppliers you should consider a number of factors:
- how long they have been in business
- the validity of customer reviews
- the product range on offer
- delivery times
- pricing and flexibility with negotiation
- minimum order quantities and volume discounts
- customer service
- financial stability
You should carry out a supplier visit before committing to an order as this is the best way to assess their processes and verify their reputation. Are you treated with respect and in a professional manner or does the supplier not seem to understand you will help grow their business?
The relationship between a retail store and its suppliers is a crucial part of the supply chain in terms of communication and building business.
How to contact suppliers
Before you commit to working with a supplier, you should do your research.
To find suppliers:
- research the Internet – look in online directories
- read the trade publications of the industries you wish to operate in
- try and find out who your competitors’ suppliers are (this may be challenging as they won’t want to give this information away)
- attend trade shows related to your product category
- visit the Ankorstore home page
Select several sellers that offer the products you want to sell in your store and ask them for comparison quotes.
What to consider when deciding which supplier to use
The suppliers you choose will be one of the factors behind the profitability of your retail store. These are the things to consider when reviewing suppliers:
- price – a good supplier is prepared to negotiate prices, especially if you are placing a bulk order or entering into a long-term contract
- range – your suppliers should offer a wide selection of products so you can present a varied product range in your store
- shipping – a reliable supplier will deliver on time and not miss delivery deadlines
- reactivity – the supplier should be able to handle an unexpected increase in demand, especially for seasonal products
- capacity – can the supplier handle the number of goods you wish to order?
- quality – the goods you order must be in excellent condition and adhere to local regulations, for example, health and safety
- samples – a good supplier will send you a free sample of the product, so you can inspect its quality
Bear in mind that suppliers can go out of business fast, especially smaller ones. Always have an alternative supplier in mind, as you never know when you may need to find a new one. It’s also a good idea to have several suppliers, rather than rely on one. If one has temporary supply problems you can then order stock from another, to prevent empty shelves.
Supply chain management
When you have selected the suppliers you wish to purchase from you need to set up a reliable supply chain management process. This means managing the inventory by ordering at the right time to ensure the purchase of new stock and current stock replenishment runs seamlessly.
The objective is to hold stock at your premises for as little time as possible, as this is a cost to the business. In simple terms, the ideal supply chain management scenario is:
Order stock > check and hold for minimum period > shop floor > sales
Modern technology allows automated stock systems to be linked with supplier networks, which all contributes to the efficiency of the business.
How to pay suppliers
Before you sign a contract, you should understand the payment terms as well as the trade prices. A supplier with long payment terms, for example, between 60 and 90 days, will greatly assist your cash flow, especially if you are a small business.
Once you agree to buy stock from a supplier, you place a purchase order with the supplier, which commits you to the transaction. This will be matched to the invoice the supplier sends you when the goods have been dispatched.
Retailers usually make payment by bank transfer after accepting the goods and when the payment due date has arrived.
Always pay your suppliers on time to maintain a good company reputation.
Buying from suppliers abroad
You may find a supplier in a different country than your business. It’s often cheaper to buy stock from the Far East than from a local supplier.
Always check the quality of products from the Far East as they may not be to the same standards as those made by manufacturers in Europe. Ask for samples, so you can see the quality of the goods.
It’s also a good idea to visit suppliers if you’re buying direct, both locally and abroad. However, this may not be feasible due to travel costs, but it could save you money in the long term.
During a supplier visit you have the opportunity to assess the company’s structure in terms of organisation, operational processes, manufacturing facilities and overall set-up. This is a valuable chance to prevent any future problems from occurring, such as supply chain issues or quality standards, which can be expensive to rectify. Vetting suppliers is also the occasion to build a good business relationship with the supplier, which is difficult to do with only online communication.
Marketplaces as a supply tool
A marketplace is a way to purchase inventory for your retail store if you’re just starting out and don’t want to over purchase. The Ankorstore website is the ideal marketplace for retailers that want to offer a varied product range but order in small quantities.
The product categories you can order from are vast and include:
- Home and kitchenware
- Food and drink
- Beauty and wellness
- Fashion and accessories
- Products for babies and children
- Stationery and hobby items
- Seasonal products
The Ankorstore marketplace is an easy and economical way to manage your product supply without purchasing large volumes.
If you agree to exclusivity, whether selling through an e-commerce platform or in a bricks-and-mortar store, the supplier agrees to only sell to you. You must remember that you are also legally bound to purchase the agreed products from the supplier.
Selling an exclusive product makes your business unique as you are offering something people can’t buy elsewhere. This will help you build a unique brand, for example, if you’re selling expensive handbags or scented candles.
Whatever the product, you should be sure there is market demand for it or else you could be left with excess stock you can’t sell.
If you want more advice on setting up a retail store and finding suppliers why not join our Ankorstart program? It’s free and has been designed to give you the support you need when creating a small business.
Does Ankorstore sell wholesale products?
Yes. All our suppliers sell at cost price, so you can decide what retail price you set. The advantage is that there are low minimum order quantities, so you can order a mix of products.
Is it best to work with suppliers abroad or locally?
This will entirely depend on the products you want to sell. If you’re going to sell mass items such as stationery or homeware you might want to buy from the Far East. Whereas selling hand-made organic chocolates or cakes might be better from a local supplier.
Is dropshipping like a marketplace?
No. The two are completely different. With a marketplace, you order products from a wholesaler, and you send them to your customers. A dropshipper stores the products for you and dispatches them to your customers.
Is looking on the Internet a good way to find suppliers?
It is, but be careful not to waste your time. There will be hundreds of suppliers out there, and you need to find out if they are reliable. Subscribing to trade newsletters and magazines is a good way to find suppliers.
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