Barbara Racz

Barbara Racz

Senior Marketing e Content Manager di Syncee

Long-term or short-term supplier relationships?

If you are a retail business owner you probably want to be successful in the long run. Here you can get to know details about supplier relationships.

When you establish your retail business and start to work with the dropshipping method, there’s a lot of things you have to make decisions about. It’s important to run a dropshipping business in the best and most beneficial way. After you find out what products you want to sell in your online store you have further steps to take. Find the suppliers that you want to sell products from. Syncee Marketplace is a great directory for you where you can find millions of products from reliable suppliers from all over the world. f you do everything right, you can run your retail business successfully for a long time investing only a small amount of money into it. And that’s what you want, aren’t you? Here below you can read facts about long-term and short-term supplier relationships. You can choose which is the best for you.

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About Supplier Relationships in General

We can discuss what the right length of time is for a supplier relationship. Some say short-term is okay. Because for example you can renew your store from time to time or you can follow recent trends. Others say a long-term relationship is the best – e.g. because you can feel yourself safe as you work with well-tried suppliers. You may have to find the right balance between short-term and long-term partnerships. Everything depends on what products you sell. If it’s a trending product, if it’s a shortage on the market, if it’s unique, if it’s an everyday need or if it’s a critical item. You need to have some tactics and your own strategy while getting into your business and start the whole process. Don’t forget: the supplier is a major player in the sales process.

What makes a good supplier? These qualities are being organized, efficiency, technological investment, dedicated support representatives, expert staff, and industry focus, being centrally located, ability to take orders over e-mail or online systems, stability. You can read more about these in one of our other articles.

There are two types of suppliers you can contact:

  • marketplaces (and other virtual retailers from there)
  • real B2B suppliers

In the following, we will talk about short-term supplier relationship as contact with marketplaces (and its small virtual retailers) and about long-term supplier relationship as contact with real B2B suppliers.

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Short-term Supplier Relationship

You can build a short-term relationship with retail marketplaces if you want, however it has its own disadvantages. In this case, there are more reasons why you do this. One of these reasons can be that you always want to get newer and newer products and you don’t settle for just one client. Another reason can be that you weren’t satisfied with what you got. And another can be for one of the dropshipping methods. You (as a retailer) want to work with retail marketplaces (as suppliers). So as you can see, this way you can import products from other virtual retailers which have their shop on big retail marketplaces. These marketplaces are for example AliExpress, eBay or Amazon.

If you want to get products from these retail marketplaces what you can do is to choose products one by one from the marketplaces. Those are the ones that you are going to sell on your own web store. If we are here anyway, let us mention that in dropshipping you don’t have real stock holdings. Actually, if you work with these retail marketplaces, the products your customers order from your store will get delivered to their house directly. One of dropshipping’s biggest advantages is that there’s no need to invest too much money into your business. Furthermore, you can have a wide-ranged selection.

Disadvantages of short-term supplier relationship and doing dropshipping with retail marketplaces:
  • long delivery time: customers often wait a month or more until the product they ordered get delivered, and nobody likes this
  • higher prices: the owner of the Shopify web store sets the margin for the prices of items from the suppliers/retail marketplaces for monetization purposes. But who wants to buy products at a higher price when they are available for less money on the original stores (for example on AliExpress)?
  • customs duty and VAT: if the customers order goods by reaching a certain money limit they have to search for ordering documents and manage VAT and customs duty matters, and pay more
  • unknown quality: as Shopify web stores don’t have warehouses, they can’t even see and check the products they sell
  • lost package: it’s not a new problem in the world of ordering goods from abroad, and it can cause inconvenience for both the web store and the customer
  • problems with guarantee: web stores have to send back the packages to the other side of the globe, the product can be lost again, and the biggest problem is when the retailer disappears and there’s no place to send back the products that would need guarantee service, there’s no chance to get money back or to get a new product
  • reliability at issue: you don’t know anything about the retailers from the marketplace, you are not able to know if they are reliable or no
  • banks moving apart: because of the problems with reliability bank card companies don’t like to manage with money from classical dropshipping businesses
  • items arrive from different places: if customers order things that are from different retailers (from the marketplaces), they won’t get the packages in one main box, they will get that number of parcels as many orders they made. There’s no place where the products can wait for each other.
  • one in a million: if you cooperate with retail marketplaces you are probably going to sell products that everyone else does, you don’t have unique items and it will be hard to get customers even if you have a good marketing. One of its reasons is probably the one that you can also read above. The fact that nobody wants to buy products at a higher price if they can buy those cheaper from another place. If you want to be successful you need to find a niche.

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Long-term Supplier Relationship

Probably the only way you can get into a long-term relationship with a supplier is to contact a real B2B company. If you want to be successful and have advantages, you need to work with this kind of dropshipping. The benefits of long-term supplier relationships are, for example, reduced costs, you can feel safe, you can get to know the supplier better, and mitigate volatility (volatility means the price’s changeability and mobility). These are just some of the benefits of cooperating with real B2B suppliers, you can read more of it below.

What is this real B2B supplier cooperation about? So, you as a retailer associate with real suppliers from who you will get products. You will add their items to your online store, so customers will buy these. You choose your suppliers based on what kind of shop you would like to have, and what you want to sell. It will be a long-term and reliable cooperation and business for both of you. Customers will order from you, these data will be forwarded to your supplier partner, and they will deliver the product to your customer if you do not decide on another way.

You can ask for the products to arrive at your place first, then you can add all products that belong to one order but are from different suppliers in one box, and you can ship them to your customer. The advantage of this is that you can make sure about what you are selling. Also, about what is the quality of the items, if they are damaged or not. You don’t even have to worry about renting a warehouse because you can place the packages well. In your own living room, garage, or kitchen for that short time. On Syncee Marketplace you can find real B2B suppliers with unique products from all over the world!

Advantages of long-term supplier relationship and doing dropshipping with real B2B suppliers:
  • responsibility: they are real, legal companies, you can talk with them and contact them anytime if you have a question. They have their own website, and they won’t disappear without a trace.
  • quality: you choose who do you want to work with, you know what kind of products it distributes, you can make sure about the quality, so nothing will surprise you
  • lower purchase and sales price: you can get the products at a lower price from wholesalers than retailers, and even if you set the margin for prices it’s going to be a good bargain for the customers
  • guarantee: the handling of warranty problems are not cumbersome because you are close to the wholesaler and you regularly communicate with them.
  • fast shipping: if you order from a cross-border supplier you get the products in 3-7 days. If you order from a supplier who is in your country, you and the customers can get the products in 1-2 days. Or on the day of ordering
  • you don’t have to keep your money in products: you work with virtual stock by using the constantly updating database of the supplier. So you don’t have high investment costs
  • help in marketing: if you work with a real wholesaler you will get help in marketing matters also from this client
  • profit improvement: if you are in a good relationship with your supplier you will have profit improvement soon
  • improvement in general: you can improve continually together with your supplier in your common business
  • unified image: with long-term supplier relationship you can build a more unified image for your business
  • safety: if you work with someone for a long time, you can feel safe, you don’t have to risk much
  • reduced costs: you can have reduced costs by making your business like this
  • being always updated: if you use the appropriate Shopify application you can keep your online shop’s data always updated automatically. You won’t have problems with customers that a certain item is missing.

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How Can You Improve Your Relationship with Long-term Suppliers?

The most important thing in improving your relationship with anyone is to be reliable. This is also the best you can do here. You need to make your suppliers sure that they can trust you.

If you want to improve the relationship with long-term suppliers:
  • you need to be always up-to-date,
  • you need to ensure a channel where you can keep in touch,
  • always keep in touch with them, communicate,
  • do not forget that you are not the only one,
  • provide appropriate technical conditions,
  • make sure the contract you have made includes everything important and do what you two agreed on,
  • if there’s a misunderstanding or a small mistake be cooperative and don’t let the good atmosphere go away,
  • but next to the previous one, be strong-minded and don’t let go your own rights, wills, and purpose,
  • understand the other’s point of view, be fair
  • trust the others,
  • review the products from the supplier to make sure everything is okay,
  • be reliable,
  • do not hesitate to ask,
  • you and the supplier also have to recognize risks,
  • act well with money, pay on time,
  • be professional,
  • if everything is good with your own business inside, other things going to be well too.

As you have seen above, the only suppliers you can probably work with in the long term are real B2B supplier. On B2C marketplaces like AliExpress you are reselling products from other retailers, and it isn’t worth it for you. You also won’t know anything about each other.

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