When To Fire A Supplier

So I’ve been thinking lately; when is the appropriate time to fire a supplier? I’ve fired some quickly, and some after a long thoughtful process. Before we dig in lets remember a few things:

1. Work to add vendor in the first place. Adding a new vendor, and all their products, is usually a big job in the first place. You’d hate to do all that work and reap no rewards at all. So firing a supplier isn’t something to be taken lightly or a decision to be made quickly.

2. Time for search engines/advertising to work. When you add new items, it does take time for the search engines to find them, and for any advertising methods you use to work. Don’t be too quick to pull the plug just because a supplier’s items aren’t selling; give things some time.

3. Most issues can be worked out with communication. Suppliers want to work with retailers; retailers want to work with suppliers. So if you’re having problems talk with them and express your concerns. Most issues can be worked out.

So, when to fire?

1. Constant customer complaints. This, of course, is one of the biggest ones. Customers complain about all sorts of things. But, when there is a string of complaints that fall upon the supplier, you’ve got a problem. Now, while we all would like to blame all of our problems on the supplier, the truth is that most issues are not their fault. Look internally first. Some things that could be the suppliers fault are: product quality, extremely slow shipping, shipping the wrong item, and shipping damages due to poor packaging.
2. Problems outweigh the benefits. OK, so you’ve got vendor problems. Don’t jump and get rid of them too quickly. If you are selling a ton of their stuff, and making some good margins on it, maybe it’s worth it to you to just take your hits and keep going. Don’t sacrifice good sales for occasional mistakes. Be sure that the problems greatly outweigh your gain before considering a change.
3. Vendor shows no signs of changing. Always give the vendor a chance. Remember, we have spent valuable time and resources to get these products on the site. Express your issues with the vendor and see how they respond. In a perfect world, they’ll do what they can go work with you. If they tell you “tough luck” well then you’ve got some decisions to make.
4. You feel as though you’ve done everything possible to save the relationship. You’ve done everything you can think of and still no improvements. Time to decide if it’s really worth it or not.
5. Almost no sales. This is, of course, after plenty of time has passed. I’ve had suppliers whose stuff has been on the site for 6 months to a year without a single bite, that’s when to re-evaluate. Make sure it’s been long enough, as discussed above.
6. Made a mistake in the first place. All of the above reasons assume that you want to keep the items. Sometimes you don’t. Not all matches are made in heaven. Maybe your system and theirs simply don’t work together. Maybe you thought the items would blend with your site, but they just don’t. Maybe you just need to move on. In these cases, go for it.

Conclusion

The reason that I stress so much to keep the relationship going at all costs is because drop ship items are virtual. That is, once you’ve got the items up on the site it doesn’t cost you anything to keep them there. It’s not like you’re buying inventory, stocking them, and having to dust them when they are in your warehouse forever. In many cases, it’s simply easier to leave the items on the site and see what happens. The book, The Long Tail, by Chris Anderson explains this further. Bottom line is to use caution with all decisions regarding your business. Don’t take anything lightly and hopefully good decisions will follow.

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