There are a lot of things we bring from our pre-Amazon lives into our Amazon lives. I felt it was a good time to share with you 5 ways I have developed meaningful, lasting and profitable relationships with my suppliers and partners.
These tricks helped me grow to a 7-figure book of business, and are easily repeatable by everyone reading this post.
Do you know what the # 1 way to win in the wholesale business is? Building Real Relationships.
These 5 things are what I did that got me special deals, early access, exclusive information, and the inside track that helped me grow. Try some or all of these with your wholesale suppliers and see the difference.
Be You, but maybe a little more Polite You
Don’t “turn on the charm.” Be REAL. Be yourself. Sounds like dating tips, and it basically is!
Exude confidence, but don’t be arrogant. Be polite and respectful. Make it a point to thank people.
When you want something, you don’t want to beg. You don’t want to harp or nag. People sense that a mile away and will avoid you.
If you do those simple things, you will not only SEEM like someone your selling partners want to work with, you will be someone they will think of first when new discounts, sales and opportunities are up for grabs.
Add value beyond just adding new sales
It’s both who you know, and what you know. And, you need to be a problem solver. Ask your representative, “What keeps you up at night?” You’ll be surprised what you learn.
Maybe there’s a bonus that is at risk if they don’t move some stock, maybe you have an opportunity to make a 1 time big buy at a bigger discount to help them meet their quotas for a bonus. That can help you a lot in the future. Because you solved a specific problem.
In other words, develop a track record where you can point to specific things you have done. Maybe create a blog or curate a Facebook page with content that would be interesting to customers of the products you sell as a way to create audiences for the products the supplier sells, outside of just Amazon. Within the Amazon experience, you could describe ways you help protecting brand value by keeping listings correct or helping to identify sellers not following MAP (minimum advertised pricing) policies.
There could also be things you do above and beyond in your business that go towards helping you sell or ways in which you help end customers. There are companies that have made a killing by taking returns from suppliers that are not sellable, and setting up an e-commerce site and sell spare parts or components of a larger product.
Money Talks
When your supplier relationship is new, many suppliers take a chance and provide credit terms. That may or may not be a part of your business model, and you prefer to go on a credit card and pre-payment terms, try this trick…
Speak to your supplier early on, maybe after your second or third re-order, and ask about the terms you are on. Remind them that they are taking a 3% or more hit in credit card processing fees.
Propose a deal where you will get first crack at end-of-series or clearance before anyone else, and in exchange you will pay the 3% credit card processing fees on all orders you make going forward.
Many of you will think that’s just crazy talk.
Let me put this into the collective consciousness by asking this question: What is your current ACoS for Amazon Sponsored Product ads?
- If you sell something at $30, with a 33% COGS that would be $10 wholesale you spend with your vendor.
- Let’s say your Amazon ACoS is 3% on a good day. That’s 3% of Gross Sale price. That works out to $0.90.
- Say that $10 item was one that you paid 3% more on. Your product costs you $10.30 instead of $10.00. It’s a $0.30 investment. $0.30 of $30 sell price is 1% of the Gross Sale price.
- Think of this as a marketing expense and it’s an easier pill to swallow.
- But, think of it like this: You will probably have a new best friend in your supplier’s rep, and get access to products first and on top of that being that the supplier is incentivized to move tail-end & clearance items and know you’ll pay 3% premium on those, it’s a veritable pantheon of commerce delights.
Don’t be a Greedy Cheeseball
Suppliers I speak with routinely complain about this one annoying trait that happens very very often. That is the new seller asking for discounts, freebies and other throw-ins and they haven’t made any purchases, nor have they developed a relationship at all.
Here’s some guidance I have to offer if you are early-ish to the wholesale club and are looking for some idea on what you can expect on the low end based on your spend. Keep in mind that wholesale is a volume business, and margins from distributors are thinner than with retailers,
Let’s say your supplier has a minimum Initial Order of $500 and an annual spend expectation of about $5000. Doing some math, that $5000 should work out to $416.67 per month. So, at the start they want you to order more than 1 month of stock. Take note of that.
- If your average monthly purchases are 1x to 2x of the monthly expected spend, don’t ask for anything. You are at the minimum end of the spectrum. You get deals for volume, not minimum volume. Rookie mistake, please avoid this.
- If your average monthly purchases are 3x-5x (ie. $1260 to $2100, you could start to ask for some discounts. Depending on the product category, etc, that could be in the 1-2% off the list price range. Or, equivalent value of in-kind offers such as free freight, or services they perhaps offer.
- If your average monthly purchases are 7-10x, you can probably see discounts of 1-5%, and 10x minimum monthly spend you can expect maybe 2-7%.
Those discounts don’t seem like a lot, and they’re not. But, as I mentioned it’s a volumes game and those are less than in some product categories and industries. There are often perks available to “high rollers” that spend more, and on a consistent basis and are paying on time every time. You may be able to work out better payment terms, pre-order access to “that hot new product” before it’s available for others, maybe they will add additional services (think prep or labelling, inventory storage or fulfillment) for your ordered products.
So, the main take-away here is to earn your supplier’s attention, treat them well as individuals and with consistent purchases, and they will treat you very well.
Be a Friend
There’s a saying in sales, “Always Be Closing”. That means you want to do the things to drive customer orders through your sales funnel, and get in the habit of closing business as often as reasonable. Top sales people know that keeping a customer happy after the sale is just as, or more important, as the pre-sales experience. In the wholesale business, you are always selling yourself, and you should think of yourself as in competition for the opportunities and attention of your supplier and your representative so that you can be top of mind. You want them to want to talk to you.
Here’s a few thoughts that are important.
- Send hand written thank you notes twice per year per sales rep at each supplier.
- Go to Amazon and buy a pack of 50 “thank you” cards that are blank inside.
- Your mission, should you choose to accept it, is to hand write a thank you to your sales rep two times per year.
- Pick a recent event that involved their actions and thank them for their contribution to the success of your business.
- For example, “Samantha, Thank you very much with your assistance in processing my most recent order. Everything arrived in good order and we are already selling through. I can always count on my orders with you going perfectly with XYC SupplyCorp. Thank you, My Name Signed Here”.
- Do mention them by name.
- Do mention one thing that they had a hand in doing positively.
- Send a gift basket.
- During Q4, send a gift basket to your rep and include a note that thanks them for their part in making your business a success, and that you are looking forward to a positive next year.
- $20 to $50 is all you need to spend on the basket, but if you ship it, you’ll probably end up spending $75 to $100 on a decent basket. It’s 100% worth it and you will get noticed.
- Give them a call.
- Make a deliberate effort to contact your representative every 3-6 weeks. Preferably accompany that with an order a day or two before. This gives a great opportunity to call and make real contact. You could check in with them to see if they have any questions about your order. They may. It will save them from writing an email.
- Great opportunity to ask them about their holiday plans, any weekend plans. Do ask about their hobbies or how they spend free time. Do ask about kids or partner. Don’t talk politics. Don’t talk religion. Don’t talk sports unless you know that sport (lol… thinking of a couple embarrassing encounters in my youth on this one). Just be friendly.
- Invite them out
- This typically works best if you are local, and not living through an International Pandemic… but…
- A meal or drinks can go a long way to grease the wheels of business.
- Spending time with people outside the work setting is a great way to break down barriers.
- Just don’t end up being a cheeseball and take advantage of that.
Wrapping it up
In this post, I have covered 5 things you can do to . There’s some suggestions that may feel out of your comfort zone, so I would challenge you to just think about what you’ve read here and make it your own.
My level of comfort has evolved over time. It didn’t come over night. Circumstance forced me to work over the phone and also in person at times when it wasn’t the way I wanted to work with people. I know I am a unique character, and I am not in the herd. I’m 100% fine with that. For sure, as an introvert, I have had to learn ways to be more outgoing and often at the personal cost of “just putting it out there and taking a chance”. Through decades of trial and error I’ve struck a cadence and balance in how I approach these things and am 100% confident you will find your own path too.
But, there are fantastic rewards out there for you if you make the effort to first think about your supplier’s staff as your partners and comrades, and make calculated efforts — baby steps if you must — but steps towards being an improved you every day, and that will turn into better supplier relationships and that my friends, means you are making more money.