How to Source Vendors for Your E-Commerce Business?

Procurement is an essential business process for setting up a business and involves sourcing of goods or services.

Launching an online business can be a daunting task. It may involve pre-requisites like identifying a high-potential product, building your online presence, and procurement to name a few.

Procurement is an essential business process for setting up a business and involves sourcing of goods or services. It might seem like a simple process, but you can find selecting a vendor challenging and this blog may help you out with that. Vendors are one of the most crucial partners for your business.

Vendors are the people or businesses that supply goods and services to your company. Reliable vendors can ensure long and successful association. They can also help you achieve better profits and revenues.

Trusted vendors may give you the best products or services possible at the best price. Some of them also have a contingency plan in place to deal with late shipments or customer complaints, which can boost your ability to meet customer expectations.

Having an unreliable vendor can be expensive for your business. It might even damage your reputation in the market.
How to Source Vendors for Your E-Commerce Business?

How to Source Vendors for Your E-Commerce Business?

Selecting a vendor for your online business can be nerve-racking. But shortlisting a good vendor can prevent stress in the long-run. Try to find an e-commerce vendor who is professional. Such vendors can help run your business smoothly. If you want to find the ideal vendor for your online business, you can follow these recommendations:

Understand your Distribution Channels

You may start by understanding your distribution channel. A distribution channel is a chain of businesses or third-party groups through which products pass until they reach the end customer. For instance, products have to pass various stages to finally reach the customer. They go through a chain that consists of manufacturers, wholesalers and retailers. Distribution channels can be either short or long, depending on the number of intermediaries involved.

Having a long distribution channel increases the total cost of delivering the product to the final buyer. As a small-and-medium-sized business (SMB) owner, you may consider keeping your distribution channel short to reduce expenses.

Hire a Dropshipper

Dropshipping is one of the convenient ways to sell products. It eliminates the need to store inventory. This may serve as a major plus-point for SMBs. When a customer places an order, your dropshipper can directly ship the product to them. The dropshipper charges you for the products as and when they are sold.

With dropshipping, you do not have to worry about managing a warehouse or packing and shipping the orders. However, the use of this strategy might result in a lower profit margin. You may have to sell a lot to make a decent profit.
How to Source Vendors for Your E-Commerce Business?

Pitch Directly to Manufacturer

Vendor payments can reduce your profit margins. But you may avoid this by removing the middlemen. Consider sourcing the product you want to sell directly from the manufacturer. However, most manufacturers have minimum order requirements, implying that you have to place bulk orders. This may not be a feasible option. Ordering hundreds of items at a time may require a significant financial investment and a storage area.

On the positive side, you can purchase the products at the lowest possible price. With no middlemen, you can also enjoy more profit on each sale.

Search Online and Shortlist Suppliers

One of the effective ways to find vendors or suppliers is by searching online. You can also look them up in the telephone directories of businesses. Some of the key qualities you may consider while selecting an e-commerce vendor are outlined below:
  • Longevity and Consistency: You may select a vendor who is financially stable. Check how long they have been in business. Research if they are consistent in the quality of product or service they supply. Read their customer reviews. If they have a ton of negative reviews, then do not shortlist them.
  • Price and Value: Do not settle for a vendor who quotes the lowest price. Find vendors who provide the maximum value for the price they are asking. These can be in the form of accountability for quality issues, a contingency plan for unforeseeable uses, and high-quality service.
  • Communication and Flexibility: Find e-commerce vendors who respond to your queries as soon as possible. Beware of vendors who promise too much and then do not answer your questions. Good vendors are also flexible in fulfilling your order. Find a vendor who is willing to go the extra mile to ensure that your business operates seamlessly.
  • Regulatory Compliance: Look for a vendor that complies with all the relevant laws. Any regulatory non-compliance can lead to legal consequences for your business. You may start by checking if the vendor has a valid business license.
  • Location: You may select a local vendor if you want to ensure quick delivery. You might have to face extra freight costs and longer delivery times if you deal with distant vendors.
Based on the above criteria, you may shortlist vendors and connect with them. You can request written quotations or even a sample of products or services you need from them. Compare their quality and select the ones that meet your business needs.

Do a Thorough Background Check

Before you take the final decision, do a thorough background check of your shortlisted vendor. Do not think of this as an extra precaution to protect your business but a necessity. The risks of not conducting a background check of the vendor are many. For example, it may lead to reputational loss, fines, and lawsuits.

You can start by checking the vendor’s online reviews. Ask them for client testimonials. The whole aim of a vendor background check is to find a vendor who has a good reputation.

Offer an Equal Deal

Negotiate with your shortlisted vendor. Try to get the best profit margins for your business. This may not be easy since some vendors tend to be price sensitive. You might also want to maintain a cordial relationship with them to ensure long-term partnership. Therefore, look for a common ground. Make sure to portray yourself as someone who can give them a lot of business. If they do not negotiate the price, try to focus on other aspects. For example, you may ask for discounts or reduce the down payment amount. You may even ask for faster shipping.

Do not forget to strike a deal that is profitable to both you and your vendor. This may ensure a long-term partnership and ultimately, help you generate more profit for the business.


Searching for a vendor can be a complex task. Take time to find the right e-commerce vendor for your business. Be vigilant when you select one, because a good vendor will let you enjoy increased profits and help enhance customer relations.
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