The outbreak of the COVID-19 pandemic caused the Supply Chain sector to suffer worldwide. This led to congestion and delays which negatively influenced the lead times and the capacity of sellers to be in stock.
Suppliers play a crucial role in the e-commerce world, and, after the first two years of this pandemic, their importance increased significantly, especially due to how highly competitive the market has become. By creating a strong and reliable alliance with their suppliers, an e-commerce seller will be able to achieve:
A proper one fits all manual on how to build a good, profitable, and lasting professional relationship does not exist but, in this article, we will analyze the main factors that should be considered when building one with a supplier.
When choosing and starting to communicate with a supplier it is crucial to understand and remember who they are and where they are located.
Perhaps you opted for a local supplier with whom you might have a better understanding of how to communicate, but due to a multitude of reasons you might have preferred going international, where you can encounter different time zones, language skills, culture, and ways of working.
Some questions you should ask yourself are:
In the United States there’s important holidays that might affect the response time, such as the 4th of July, Thanksgiving, Christmas, Memorial Day, New Year.
In India you should remember their national Republic Day, Independence Day, Diwali, Holi, and Gandhi Jayanti.
When it comes to China, the most important and long ones are the Chinese New Year and the Golden Week, but during the year there are other bank holidays scattered that must be considered when communicating, calculating production and shipping lead time.
Around Europe and many other countries around the globe, on top of Christmas and New Year, you also have Easter, Epiphany, Carnival, respective National country days.
The location of the supplier might also influence the channel you would go through. In the West, a common e-mail, or a call are often the ways to reach someone, sometimes even Whatsapp/Telegram. In the East, it might be slightly different.
One of the biggest markets for suppliers is China, so understanding how to communicate with a Chinese supplier will be essential if you opt to order your products from there.
The most famous and known platform in China is Alibaba, which is a wholesale marketplace where, the vast majority, of Chinese suppliers have their online store through which sellers daily buy their stock. The website offers an internal chat, and, thanks to it, it is possible to interact with all the vendors selling on the platform.
As the collaboration progresses, you are likely to switch to another communication platform. The most known and used by Chinese suppliers is WeChat. We highly suggest using this instant messaging app to communicate with suppliers to increase their response velocity and speed up all the processes.
Remember that big e-mails or messages mean nothing if the reader on the other side of the screen doesn’t understand them. Make sure you understand what the supplier’s main language is and how comfortable they feel at your common language. It doesn’t hurt to audit your messages either, are your instructions and requests easy to understand?
Set clear expectations of what you are looking for and what you need them to provide, by defining KPIs and clear timelines.
Respect is the number one factor in business and can take you far.
If you are trying to form a long-term loyal relationship with your supplier, you are going to talk, a lot. You do not need to become friends but asking how the family is, if they spent their weekend well or even if the business is going strong, can be enough to make the connection stronger. Care about who you do business with.
At the beginning of a relationship, if a seller does not know the supplier and has no reliable feedback about them, it is vital to show a constant presence to the manufacturer by asking for weekly updates regarding the production. This will help in two ways:
One of the key rules that must always be followed concerns samples – when starting a new production or developing a new product is fundamental to require product samples from the supplier. That is not only important when comparing varied sizes but, at the same time, to check that the product quality is respected and complies with the target standards.
Starting a production is a big cost for suppliers. For this reason, they always try to exploit economies of scale when starting it and produce as many units as possible.
For this reason, when asking for a price quotation, suppliers always require a MOQ and, the price for the production always variates according to the aforementioned.
One way to have a better grip to try to reduce the price of the production is by asking first a price quotation for a lower number of units and then, once you receive it, increase the number of units in exchange for a reduction in price.
Guessing can be a loser’s game. Don’t assume everything is going well, ask your top suppliers for their honest feedback and clarify any questions or concerns, who knows if they have ideas for improvement?
The same way you would ask for Feedback, you can share yours, so they don’t have to guess either. Share the positive feedback the products have been getting, share the company’s wins and what you like the most about them. Don’t save feedback to only point up the flaws and complaints.
At the end of the day, you want to aim to be as respectful and clear as possible and expect the same in return. All that poor communication does is leading to misunderstandings, escalations, higher costs, less flexibility on deadlines, lost revenue, and fractured relationships. And we all know that if you cannot deliver a product to your clients, they will find a competitor who will.
Supply Chain Team
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