Chapter 14 - How to Identify Bad Suppliers

Mistakes can be costly, especially when starting out. One of the worst mistakes to make is to find yourself depending on bad suppliers. So how do you vet suppliers?

Sample Orders

By far the best way to test a supplier is to place a small sample order. No matter how many times you talk to them on the phone or meet them in person, all you will ever hear is what they want you to hear. Nothing beats that first order for showing you what a supplier is really like. What does a sample order do for you?

  1. Allows you to see the true quality of items, which can be different from display quality or catalogue pictures.
  2. Allows you to test the speed of delivery. Does your order take three days or three weeks to arrive?
  3. Allows you to test the picking and packing process. Is every item you ordered present, and is it well packaged to avoid damage?
  4. Allows you to test the after sale and returns process. In the case of damaged items (this will happen, even with the best suppliers), how does the wholesaler respond? Do they answer their phone or email and deal with the issue?

You can't beat a sample order. Everything else - checking company registration and VAT numbers, talking on the phone, checking out their warehouse, sending emails - is worthless in terms of truly testing a supplier. So why do so many websites advise you to do all of these things before ordering?

Because they are easy to do, they can be done from the comfort of the chair in front of your computer, and they cost nothing. A sample order costs money, so many retailers avoid this step and instead harass wholesalers for weeks or months before placing that first order. There is no quicker way to annoy a supplier than hounding them week after week, talking up the big orders you will soon be placing, but never actually doing so.

What can go wrong with an order?

So your order has arrived. Is it up to scratch? Are there problems hidden away that are not visible at first glance? What should you look for?

First of all, you need to unpack everything and ensure it is exactly what you ordered. Not all wholesalers are that careful when it comes to picking colours, and some have a nasty habit of replacing sold out lines with something else. Check this carefully.

Secondly, remove items from their packaging and check for breakages. Pay particular attention to clasps and links. A broken item is not necessarily a problem. It could be easily fixed by tightening a screw, using a little super glue, or replacing a clasp with one you bought as part of a cheap multi pack on eBay, in which case, fix the problem and move on. Check that any watches are working, and if not, try changing the battery. Anything that cannot be fixed, put to one side and raise the issue with your supplier later.

Next, separate out any silver jewellery. Weigh each item and ensure that the weight corresponds to what you ordered. Silver has a fixed value, and silver jewellery prices are based on weight, not style or design. If the supplier did not specify a weight when you ordered the jewellery, treat this supplier with caution, and check that the silver is hall marked. Remember that just because jewellery might be silver coloured, this does not mean it is sterling silver. Sterling Silver will be advertised as such - if it doesn't say sterling silver on the website or in the catalogue, then it is fashion jewellery. You will be expected to know this.

If everything is in order, congratulations, you've found a good supplier. If there is a problem, raise it with your supplier and see how they react. You should simply report the problem, preferably by email, and not get dragged into any arguments.

Problems do occur, even with the best suppliers. You need to add up all the costs of doing business with a supplier when you make decisions as to whether you want to use them going forward. It may be that Supplier A is more expensive than Supplier B, but Supplier B is unreliable or doesn't monitor quality control particularly well. It may that Supplier A sends a lot of faulty items and is slow to handle returns, but their items are unique and your customers love them.

All these different issues must be weighed against each other when you make decisions as to who to buy from. And the answers are not always straight forward. You may decide to accept problems with as much as 10% of items from a supplier because their stock is simply too unique to pass up.

But hold this thought in your mind: if you cause a supplier too many problems (and problems are defined by them, not you), they will drop you as a customer. So be careful how you deal with problems when they occur.