Finding the right suppliers is one of the most important steps when starting an online eCommerce business.

You can have a fantastic website and an excellent marketing strategy, but if your supplier regularly runs out of stock, sends poor-quality products or delivers orders late, your customers will ultimately blame your business.

For South African entrepreneurs, supplier selection is therefore something that deserves serious attention before launching an online store.

What Does an eCommerce Supplier Do?

An eCommerce supplier provides the products you sell to your customers.

Depending on your business model, the supplier may:

• Sell products to you at wholesale prices
• Supply products in bulk
• Hold stock for your business
• Pack and ship customer orders
• Provide product images
• Provide product descriptions
• Provide stock information
• Provide pricing information
• Integrate with your online store
• Provide XML or other product feeds

The supplier’s role depends on the business model you choose.

Choose Your Business Model First

Before searching for suppliers, decide how you want your business to operate.

Buying and Holding Stock

You purchase products upfront and store them yourself.

Advantages:

• Greater control over inventory
• Faster fulfilment may be possible
• You can inspect products before shipping
• You control packaging

Disadvantages:

• Requires upfront capital
• Requires storage
• Unsold stock creates risk

Dropshipping

The supplier holds the inventory and fulfils orders on your behalf.

Advantages:

• Less inventory to store
• Lower upfront stock requirements
• Easier to test different products

Disadvantages:

• Less control over fulfilment
• Supplier reliability becomes critical
• Delivery times may vary
• Profit margins can be tighter

Wholesale

You purchase products from a supplier at wholesale prices and sell them through your own online store.

This can provide greater control, but generally requires purchasing stock.

Where Can You Find Suppliers?

There are several places to look for potential suppliers.

South African Wholesalers

Local suppliers can offer important advantages.

These may include:

• Faster delivery
• Easier communication
• Local returns
• Rand-based pricing
• No international customs process for the products you purchase locally

Search for wholesalers that specialise in your chosen niche.

For example, if you’re creating a home and garden store, look for distributors specialising in homeware, outdoor products, hardware and related categories.

Manufacturers

Buying directly from a manufacturer may provide better pricing at sufficient volumes.

However, manufacturers may have minimum order quantities.

This approach can therefore be more suitable once your business has established demand.

Importers and Distributors

Importers can provide access to products manufactured internationally while allowing you to purchase through a local supplier.

This can simplify some aspects of sourcing compared with importing individual products yourself.

Supplier Marketplaces

Online supplier directories and marketplaces can help entrepreneurs discover potential suppliers.

However, treat marketplace listings as leads rather than automatic guarantees of quality.

Always conduct your own checks.

Ask the Supplier the Right Questions

Before establishing a relationship, ask detailed questions.

For example:

Do you have the products currently in stock?

How often is stock updated?

What is your wholesale price?

Is there a minimum order quantity?

How quickly are orders dispatched?

Which delivery services do you use?

What happens when an item is out of stock?

What is your returns policy?

Do you provide product images?

Do you provide product descriptions?

Can you provide an XML or other product feed?

How frequently is the feed updated?

The answers can reveal whether the supplier is suitable for an online store.

Check Product Quality

Never assume that a product will be good simply because photographs look professional.

If possible, order samples before committing to large quantities.

Inspect:

• Build quality
• Packaging
• Materials
• Size
• Functionality
• Instructions
• Branding
• Overall presentation

Remember that your customer doesn’t care that the supplier made the mistake.

If you sell the product, your reputation is on the line.

Calculate Your Real Product Cost

Wholesale price isn’t necessarily your true cost.

Your actual cost could include:

Product price + shipping + packaging + payment fees + import-related costs where applicable + other expenses

Calculate the total cost before setting your selling price.

This prevents you from discovering later that your apparent profit margin has disappeared.

Don’t Choose a Supplier Based Only on Price

The cheapest supplier isn’t necessarily the best supplier.

Imagine two suppliers offer the same product.

Supplier A is cheaper but frequently runs out of stock.

Supplier B is slightly more expensive but maintains reliable stock and delivers quickly.

Supplier B could potentially be the better business partner.

Reliability, quality and service can be worth more than saving a few rand on each product.

Check Stock Availability

One of the biggest problems in eCommerce is selling products that are no longer available.

If your online store says:

“In Stock”

but the supplier tells the customer:

“Sorry, we don’t have it.”

your customer experience suffers.

If possible, use systems that allow product availability to be updated regularly.

Automated product feeds can be particularly useful for stores with large product catalogues.

Product Feeds Can Save Time

For larger eCommerce stores, manually updating thousands of products can be extremely time-consuming.

Some suppliers provide product feeds that can automatically transfer information to an online store.

Depending on the feed and integration, information may include:

• Product names
• Descriptions
• Images
• Prices
• Stock quantities
• Product categories

This can dramatically reduce the amount of manual product administration.

However, always test an integration carefully before relying on it for your entire store.

Look at Delivery Times

South African customers increasingly expect convenient delivery.

Before choosing a supplier, determine:

• Where they dispatch from
• Which areas they deliver to
• Typical dispatch times
• Typical delivery times
• Shipping costs
• Tracking availability
• What happens when deliveries fail

If your supplier takes five days just to dispatch an order, advertising “fast delivery” on your website could create unrealistic customer expectations.

Understand the Returns Process

Returns are part of eCommerce.

Before selling a product, understand exactly what happens when a customer:

• Receives a damaged product
• Receives the wrong product
• Changes their mind
• Receives a faulty product
• Claims that an item was not delivered

Your store should have appropriate policies and processes for handling these situations.

Build Relationships With More Than One Supplier

Depending on your niche, relying entirely on one supplier can create risk.

If your only supplier suddenly stops supplying a popular product, your sales could be affected.

Where practical, develop relationships with alternative suppliers.

This can also help you compare pricing, stock and service.

Beware of Supplier Red Flags

Be cautious if a supplier:

• Refuses to provide basic business information
• Has suspiciously low prices
• Won’t provide product details
• Cannot explain their returns process
• Consistently misses delivery commitments
• Has poor communication
• Demands unusual payment arrangements
• Makes unrealistic promises

Do your research before sending money or committing to significant stock purchases.

Test Before You Scale

One of the safest approaches is to start small.

Choose a limited number of products.

Place sample orders.

Test delivery.

Evaluate quality.

Communicate with the supplier.

See how customers respond.

Once you know the supplier is reliable, you can consider expanding your relationship.

Think Like Your Customer

Before partnering with a supplier, imagine that you are the customer.

Would you be happy receiving this product?

Would you accept the delivery time?

Is the packaging professional?

Is the product description accurate?

Would you buy from the store again?

If the answer is no, changing suppliers may be better than trying to fix the problem later.

Final Thoughts

Your supplier can become one of your most important business partners.

Take the time to research potential suppliers, compare pricing and service, test products and understand fulfilment before launching your store.

Don’t choose a supplier simply because they have the cheapest products.

Look for quality, reliability, communication, stock availability and sustainable margins.

A strong supplier relationship can help your online business grow.

A poor supplier relationship can damage your reputation before your business has even had the chance to succeed.

Our-School is committed to helping aspiring South African entrepreneurs develop practical eCommerce, online business and digital marketing skills so they can build stronger businesses in the digital economy.