How Much Information Should I Give My Supplier About My Customer?

Many drop ship retailers worry about their suppliers “stealing” their customers. They worry that with all the information needed in order to ship the product, the supplier will start advertising to the customer directly for additional sales in the future; thereby cutting you out.

In my experience, this rarely happens. In fact, I don’t think it’s ever happened to me. It all boils down to being careful when choosing your suppliers. Make sure they are a good and ethical company. Have a clear understanding of what, exactly, will be in the box with your shipments. I had a vendor that did everything right, except put a sticker on the product box with their logo and website. I simply had them stop using that sticker and everything is now fine.

So What Does The Supplier Actually Need?

Well, name and address, obviously. The questions usually come with phone numbers and email addresses. I do supply phone numbers because that is passed on to the shipper (UPS or whatever). If the shipper can’t find the shipping address, they should use that phone number to contact the customer and complete the delivery. A good thing for us all.

I do not, however, give my supplier my customer’s email address. I have yet to find any reason that they would need that piece of information. Questions about the order should be coming back to you, the retailer. If they want the email address to send tracking information, give them your own. I want my company to notify my customer of shipment status, not the supplier.

Conclusion

Do your homework, pick good suppliers, and you really should never have to worry about your suppliers taking your customers. Most likely they aren’t in that business anyway. They realize there is much more in it for them to keep a retailer happy, than to take a single consumer. Double check periodically, however. You never know.

How To Be A Poor Drop Ship Supplier or Things a Drop Ship Supplier Should Never Do

I am very close to firing a supplier of mine. I really hate to do it. I’ve been with them since the beginning and while they’ve never been excellent, service-wise, I’ve been able to work through most issues. However things have gotten worse lately and I’ve about had it. So here is what they’ve done wrong.

1. Stopped Back Order Notifications. This supplier does not have inventory on their website, so you really don’t know for sure if they’ve got the item in stock or not when you order. For the most part, this hasn’t been a concern. I’d usually get an email in a day or two that an item is back ordered and I in turn would notify the customer. During the holidays, they decided that they were too busy to do this. So orders were put on back order with no notification. It is my belief that it is the supplier’s responsibility to notify the retailer promptly if an item isn’t going to ship. Not the other way around. This lead to countless “where’s my stuff” calls from customers.

1. Partial Orders. Additionally, they decided that if they had part of an order available, and part not, they’d just go ahead and ship what they had. Again with no notification to the retailer. So once again, we got countless complaints from customers that an item was missing from their order only to find out later that the supplier had back ordered it.

1. Changed Images. We also got countless complaints that the customers were getting the wrong product. After investigating, we found that the customer was getting the right item; it just looked different from the site. So, the supplier had completely changed the look of many items without notifying the retailers. So as a drop shipper, we had old product pictures without even knowing it. We had many customer complaints on this.

1. Can not supply item list. As explained in my last post, I contacted them to try to get a full product list (as well as a list of items with changed images) to try to do some updating. I was simply told that they didn’t have a product spreadsheet. How am I supposed to sell their products, if they can’t tell me what they are?

1. Terrible Website. These other issues made me start to really realize how bad their website is. Not only do they not have any inventory data, but when you check out, their shipping screen (where you choose ground, or whatever) has a cost of $0 for every available shipping method. This leads me to believe that they at one point made an attempt to give good information on their site, and just gave up. Of course, they do add shipping on later.

1. Told the owners don’t talk to people. When I voiced my concerns to my contact person (at least they have that), I asked if I could speak with an owner or some other high up manager so I could voice my concerns. I was simply told that the owners don’t talk to people. Don’t talk to people? I’m a distributor of their products and they won’t talk to me? Are you kidding? My only course of action was to send her an email and she’d pass it on.

1. No response to email with concerns. OK, so I sent the email. I confirmed with her that she got it. And after a few weeks, still no response from anyone on any issue.

So what to do? Problem is that I sell their products well, and like their products. Based on my vendor matrix, they have lots of cons but lots of sales. I hate to lose the sales, but I hate to continue with so many customer service issues that the consumer views as my fault. I’ve already lost several customers based on their practices, even got some negative feedback on shopping sites. I really don’t want that to continue.

Conclusion

My analysis is that this is probably a supplier that is really good in the bulk arena that is trying to do drop shipping without a good plan to do so. I feel as though I’ve made every effort I could to help them improve. With no return effort on their part. So, I will be removing their products this week and replacing with another vendor that I use. This other vendor doesn’t have nearly as many products, but they are similar and at least I know they are reliable. When I do remove the original supplier’s products, I will send a formal letter to let them know. In the letter I’ll reiterate my concerns and invite them to contact me when they have made improvements. I’d really like to carry their products again, but for the time being, I feel this is the right decision.

What do you think?

Five Ways To Start The Year Right With Your Drop Ship Business

It’s the beginning of the year and the perfect time to take a little time to reflect and recharge your drop ship business. While that’s easier said than done, most likely January sales are a little slow (what with the holidays just ending), so what better time to do some housework. Here are five things to do to recharge your drop ship business.

1. Close Out Accounting and Review

Everyone hates accounting, except, I guess accountants. But chances are you fell behind a little during the holiday rush. Now is the time to get everything in order. Enter all back sales receipts, get those credit card and checking accounts reconciled, and make sure your vendors get your invoices out to you. You really want to get your  numbers closed out as soon as possible. Remember, your corporate tax return is due on March 15th, not April.

Once that’s done, you need to go over your numbers to see what went well and what didn’t last year. See where too much money was spent and where more should go. If you ended the year in the red (lost money), why? Did you spend too much on advertising campaigns that didn’t work? Maybe that new laptop wasn’t a smart purchase. Who knows, but you need to examine so you can make adjustments now to get back on track. If you ended the year in the black (made money), why? What things went well and how could things be tweaked to do even better this year?

2. Review Individual Supplier Sales

Run sales reports and break it up by drop ship supplier to see what you are selling. Ask your supplier if they can run a similar sales report on your account and compare. Do their numbers match yours? Make a list of pros and cons for each supplier. You want to note things like stock levels, are they always back ordering stuff, are they easy/hard to buy from, do they invoice quickly and accurately, do they communicate well or do you never know when new/discontinued products are added? Use this list and compare to sales numbers. Here is a little matrix I use to make some supplier decisions based on this review:

-If a supplier has lots of cons and low sales, maybe it’s time to get rid of them.
-If supplier has lots of cons and high sales, it’s time to have a discussion with them. “I really love your product line and sell it well, but I’ve got some concerns, can we discuss them?”
-If a supplier has lots of pros and lots of sales, see if how you can strengthen your relationship with them.
-If a supplier has lots of pros and low sales, it’s time to communicate with them and see what can be done to sell more.

3. Identify Underperforming And Potential Product Categories

Product categories are just as important as suppliers. What product categories are doing well and which are dogs? Maybe something you carried as an afterthought has really sold well, could you expand that line with more similar and higher priced items? Conversely, you will probably see some lines that just don’t work for you. Is it worth keeping the category if you didn’t sell a single one all year long?

4. Check Vendors For New Prices, Discontinues, Or Missed New Items

The holidays are hectic and I know that I missed some updates from my suppliers. Now is the time to get updated product lists and make sure you’ve deleted old/unavailable product and updated any price changes. Even more importantly, did a supplier add a great new item that you forgot about during the rush? Well then add it and promote it, quick!

5. Clean Up!

Finally, after a crazy November and December, I bet your office is a royal mess (mine is). Time to clean. Buy a fresh box of folders and eliminate that “to be filed” pile of papers. Get rid of the clutter, the excess cords that don’t connect anything, the trash and boxes, everything that is just in the way. Put stuff back in cabinets and drawers where they belong. Maybe you should, dare I say, dust and vacuum. Believe it or not, cleaning up can go a long way to boosting your morale and making you feel like you’re ready to tackle another long year.

5 Random Thoughts on Product Selection

1.  Do I sell one thing or lots of different things?

A question that will have as many different answers as there are retailers.While there is no straight answer, there are things to consider. We can’t all be the walmarts or amazons of the world. These super stores carry a narrow selection of a great many things. In other words, they sell lots of kinds of products, but just a handful of selection in each of the categories. Time and time again it has been shown that small companies do better when they specialize.

2. Keep true to your store name

A lot of times your store name or URL will answer the product selection question for you. Bob’s Store could sell anything, but boathardware.com had better not be selling diamond earrings. Remember, just because you COULD sell a certain product, doesn’t mean you SHOULD. With each product you consider selling, think about how it would go with your other products. Does the new item blend in, or stick out like a sore thumb. If you had a real physical store, and you had these items next to each other on a shelf, how would it look? Remember that your customers are coming to your store for a specific reason. Adding weird and unrelated products can cause confusion and hurt your credibility.

3. Choose a nitch and stick with it

Yes it is here twice; yes it is that important. Specialize, specialize, specialize. It is of paramount importance to find a product you are an expert on, something you have an inside track on, or something that no one else is doing, and be the best at it.

4. One supplier can help with shipping estimates

Having one supplier makes things really easy. There’s no confusion as to where to send an order, you’ve got one point of contact for any and all issues, and you’ve only got to keep up with one set of price changes (and product additions/deletions/etc.). It also makes shipping costs a breeze. If everything is shipping from one zip code, it’s a whole lot easier to use weight and get an accurate shipping estimate. By contrast, if you’ve got 10 vendors from all over the country (as I have), shipping can be a nightmare; you often end up loosing on some shipping, and being unfair on others.

5. One thing puts all your eggs in one basket

However I am not a fan of single source drop shipping. If you have really defined your nitch and there is only one really good drop ship supplier available, then fine. But I think most stores will have the need for enough variety in products to have at least a few vendors. Which is good. Now you do lose the ease of shipping. But one supplier does put all your eggs in one basket, so to say. What if that supplier suddenly goes out of business, suddenly greatly increases your prices, or becomes the most unreliable shipper in the industry? With multiple suppliers you have options. It’s hard to fire a supplier when you’ve only got one. And sometimes you may need to hand out a pink slip or two.

Is the customer always right? Well, no.

While it is my goal and suggestion to do everything you can to please every customer, sometimes you simply can’t and have to stick by your guns. Here is something that happened to me over the holiday season.

One of my stores sells personalized goods. When a customer places an order, they type in what they want on the item. Obviously, the store’s policy is no returns on personalized goods. From time to time, I get a customer that lets me know that something was not personalized correctly and they want it done over. When this happens, I check the original order to see what happened. Honestly, most of the time, it is our mistake (misspelling or whatever) and we redo the order at our cost. My opinion, a good business practice.

My issue was with a customer who tried to blame us for their mistake. This customer ordered an item that had a monogram. As we all know a monogram is first initial/last initial/middle initial with the center initial larger than the others. We produced a product as the customer ordered and sent it to them. We got a note from the customer that the initials were done in the wrong order and they demanded that we redo it and overnight a correct item. Well I checked the order and we had done the item exactly as they ordered. Turns out this customer put the initials in the wrong order. I explained our policy and offered to send them a new item, at their cost, as the mistake was theirs. The customer went on to claim that the website was confusing (monogram vs. initials) and threatened to call their credit card company and contact the Better Business Bureau if we didn’t fix the problem. Knowing for a fact that we had not made an error, I dug in my heels. I sent an email explaining that it was their responsibility to make sure their order was correct in regards to the monogram. I pointed out that the item they ordered specifically requested they fill in the monogram they wanted. I even sited several other products on the site that asked for initials to prove that we had made every effort to minimize confusion.

So to make a long story short, I got an email back from the customer saying that it was unfortunate that we would work so hard to capitalize on an honest mistake and they sincerely hope that the profit we made on her order was worth it.

So who won here?  Answer: nobody. The customer didn’t get what they wanted and I certainly lost them as a customer for life. But I really felt that I had to set a precedent here. The error was after all their fault, and I am confident that had they actually contacted their credit card company and the BBB, that those organizations would have agreed with me.

Truth be told, had this customer started out by admitting fault, politely asking for me to make an exception, and left out the threats and demands, I probably would have sent her a new product for free.

What’s done is done, and I still don’t feel good about it. Would you have chosen to fight this battle?