As if landing new wholesale suppliers wasn’t hard enough it, seems they’re being flooded with requests by other sellers – our competition.

Although this isn’t a major issue, it does make it harder to get through the noise and stand out.

While picking up the phone and calling suppliers is my go-to strategy that works like a charm (nobody seems to do this anymore!) I’ve developed a new strategy taken from a completely different industry that seems to work incredibly well as another channel to connect with suppliers.

Here’s a recent LinkedIn resource that I’ve been reading through.

When you realize that all we’re really doing is sales every single day, you can immediately use strategies successful salespeople are using, including LinkedIn.

You probably thought you’d never use your LinkedIn account again once you decided to start your own business, but it’s time to dust that account off, give it a polish and put it to work!

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There’s been a common pattern since launching Vendrive and watching our users grow. I love reading stories of people sharing their “Hero’s Journey”, going from stuck and confused to an “ah-ha” moment that changes everything. In each of these stories, there’s always a catalyst, an event or idea that was the spark that inevitably leads to their success.

After reading countless of these stories, I never would have imagined that Vendrive would be that catalyst. My email and Facebook inbox have had an influx of these stories as users share what Vendrive has enabled them to do, whether it’s our education through our private Facebook group or the features that Vendrive offers to our clients.

One of those stories is from Andy who started his business from New Zealand and sells wholesale in the US marketplace. Without giving away too much, here’s Andy’s story!

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On the 15th of April 2018, my life changed with the issue of a reseller certificate in the state where I decided to have my Prep-Center. Who would have known that these 12 numbers that flashed in front of me on screen would be the key that started a new challenge in my life?

 

This Sales Tax ID just happened to be the last piece of the jigsaw puzzle that I was waiting for after negotiating the rapids of red tape and confusion of setting up an LLC Company in the US, especially when you are located in a different country.

 

It’s now 6 weeks or so since I started my journey to contact US wholesalers on my Amazon adventure while being based in New Zealand. I have contacted over 200 of them in this time and as of today, I have just broken $500 in sales in Amazon with about $2000 of products on their way to Amazon fulfillment centers.

 

I have learned some important lessons that I thought I would share to help those people starting this same journey.

 

One of the biggest keys to my progress so far has been to have a system to help me manage the interactions that I have with Suppliers. Vendrive has been a step change in the way I manage these interactions.

 

Before I had my Sales Tax ID/Reseller Certificate I had collected around 80 Suppliers on a spreadsheet that I had gathered using Dillon’s sourcing technique.

 

Being new I was a bit lose with my sourcing criteria and I looked at products that only had 1 or 2 FBA sellers or where selling a few dollars below the $20 threshold Dillon recommend. I added them to my list. Of course, once I started contacting them then I found most of these were Private Label or had an exclusive deal with a supplier. I wasted lots of time with Suppliers that were never going to be successful. So my number one lesson learned is to stick to your criteria. If you do this filtering upfront then you have less waste when you come to the time-consuming supplier reach out. (This lesson could be titled ‘just listen to Dillon!!’)

 

My second lesson learned is around the method of contacting Suppliers. I heard it time and time again that you should call suppliers, but I’m not the best on the phone and the time zone difference from New Zealand meant that I could get maybe one or two phone calls in a day. I used that excuse and initially stuck to email. I also thought that my Kiwi accent on the phone would cause me issues.

 

Sometimes you forget that the culture is a little different. Over here we love to email, text, SMS, or Facebook messenger. We hardly ever use the phone to talk these days. I discovered that Americans love to talk. I talked to a sales rep the other day on the phone for an hour. I don’t think I even talk to my Mother on the phone for that long. That realization along with Dillon’s success in calling vs email has made me push myself to make those one or two calls a day.

 

I still have to send emails but I flag the Suppliers in Vendrive that are ‘hot’ or have the best potential to call. I then try to call those that come back asking ‘where I sell’ instead of replying via email.

 

When I had Vendrive loaded up with my 80 suppliers I started off emailing them all and it got out of hand really quickly. I found I was struggling to keep up with the back and forth nature that is email. I was getting replies from Suppliers but it normally went along the lines of

 

Supplier: “Please tell us the channels you sell”.

Me: We are an online retailer and we sell across multiple channels and marketplaces”.

Supplier; “Do you sell on Amazon?”

Me: “Yes, Amazon is one of the many channels where we sell”

Supplier “Sorry we are not accepting any more Amazon/Online sellers at this time”

 

With all this back and forth I was losing track on who was saying what, by emailing I also lost the opportunity of securing an account by talking to them and making a compelling case.

 

In regards to losing control of the interactions with Suppliers, this brings me to my third important lesson. I knew there was a better way to put some rigor around the process and I had been following the sourcing videos with Dillon and how he was using Vendrive to manage the whole wholesaler sourcing pipeline.  I already knew the answer to the problem.

 

Getting Vendrive setup was my next step to resolve my issues but it’s also where I made a big mistake. What I did wrong was to load my sheet of 80 suppliers into Vendrive when they were all at different levels of the Sourcing pipeline.

 

The lesson I learned here was around batching. I tried to manage these 80 suppliers all at once and it was a hell of a lot easier than with my spreadsheet, but I was still being overwhelmed as I couldn’t just move suppliers through a proper pipeline and the volume I was trying to manage all at once meant I wasn’t keeping Vendrive in sync with all the contact I received.

 

So here is my Fourth important lesson. Batch your suppliers into small manageable batches to move through the sourcing process. I would recommend no more than 20 at a time. The lightbulb really went off when I read the following Vendrive blog article about batching.

 

And the last insight I would like to give is another thing Dillon talks about (he is clever that boy!) It’s all about relationships!. The more I call the more relationships I build. Vendrive is not just about the Supplier sourcing pipeline, it also has a great CRM for managing the suppliers you have won. You can use it to help build those relationships. An account manager told me they had a milestone birthday coming up. I have recorded that into vendrive against their account so that I know to wish them a happy birthday on the day. Small things like this make you stand out from the crowd and gives you future opportunities. (That’s what I am hoping anyway)

 

I am still early on my journey. Has it been hard going?. It sure has! I have never been on a rollercoaster ride like this and I have put in too many hours but this seems to be a business where you need to put in all the effort up front, but once you do you get momentum and things just seem to click. I still have a lot of sourcing to go to reach my goals, but with the help of great tools like Vendrive and all the support the team offers you know anything is possible, even if you live on the other side of the world.

 

Negotiation. Did you immediately break into a sweat or is it just me?

The truth is that all we really do is sales. It’s a very odd form of sales as we’re selling someone on allowing us to give them money… SO strange.

A key variable in your wholesale success is being able to successfully get new suppliers. In order to do that, you’ll need to get good at negotiating with suppliers, both to get the account and to get better pricing.

Luckily for you, it really isn’t that difficult.

 

It’s all about positioning and setting successful goals

 

Let’s start with square one – positioning. Positioning is how you approach a conversation. Think social dynamics.

Positioning is mainly about how you say something and at what time.

As an example, instead of calling yourself a “seller”, you’re an “eCommerce owner who sells on Amazon because it frees up more capital to spend with your suppliers”.

Either way, you’re saying that you sell on Amazon, but one positions you higher than the other.

As another example and something that I routinely use, “If I can spend $20,000 a month with you I will.” It’s true. If I can spend $50,000 a month with a supplier I will because it’s profitable. By making this simple statement I let the supplier know that I’m not a small fish and that I can actually add a ton of revenue to their business each month. Now I’m in the power seat, instead of them.

Although each of these examples is incredibly simple, they directly answer common concerns that suppliers have – bad communication, small order amounts, don’t follow MAP policies, ect…

Once you know these common issues, you can better craft each conversation to immediately target these common problems and ensure that each supplier you talk with knows that those problems don’t apply to you, making you a clear winner.

This brings me to the next point – have very clear goals. Although I’m going to try my hardest to negotiate for 40%+ margin, I’m still going to be very happy at 30% margin because that’s my minimum. I didn’t fail in this case, I just didn’t succeed as much as I would have liked.

 

It’s all situational though

 

Although there are many commonalities, each conversation can be different. The way I approach these conversations is using if/then logic.

Example – IF a supplier says they are not currently accepting any new Amazon sellers, THEN say x. 

IF a supplier asks if you sell on Amazon, THEN you say, “Although we do sell on Amazon, we’re not ‘sellers’. We’re a real eCommerce company who sells on Amazon because it allows us to spend more capital with each of our suppliers.”

Ect…

Just keep this in mind while having a conversation with a new supplier.

 

What do I need to do to get to x %? 

 

Similar to positioning is how you make the ask for a better price or larger margin. Instead of simply asking for a price break, ask what you can do to go from 30% to 40% as an example.

By making the ask in this way, you show your willingness to give something up to make the gain. This evens the equation in your supplier’s eyes. Maybe they will give you another 10% margin if you carry another 100 units a month. If that works for you, do it. Sometimes, they give the 10% without you having to give anything up. This is all thanks to proper positioning early in the conversation.

Here are some examples of what I’ll use as my give to gain that extra discount or margin – offering to increase order volume, shipping to a closer warehouse (read: prep center) to potentially lower freight costs, using the extra margin to effectively grow sales volume using PPC within 30-60 days or hitting a dollar amount per order (eg. instead of a $4,000 order, could I take on a $5,000 order instead?).

It’s important to note here that we’re not expecting either ourselves or our suppliers to compromise, but to find an advantageous solution that provides enough value for us both. If we can do that, we’ve demonstrated another key skill set that our suppliers will value – effective deal-making.

Remember, we’re not placing an eCommerce order to buy new shoes here, we’re making a deal that makes both our supplier and our selves more money. Make it worth both of your time!

With proper positioning and using IF/THEN logic you will put yourself in a position where the supplier actually wants to start working with you.

A video will be a much better medium to teach negotiation and positioning, but for now, this is enough to really get your head moving and some new suppliers added.