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com
www.getwsodo.com

VETTING
SUPPLIERS

2018

Get a College Level degree

in Amazon Entrepreneurship

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Vetting Suppliers

Introduction
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In the rush for building a private label

business from the dust, many sellers
spend countless hours researching
different products and variations in
hopes of finding a winning product
with which to lay the foundation of
their new business venture on.
After building a massive list of different
products in different niches and nailing down
the variables of each, these sellers pour over
the list considering the pros and cons of each
product idea. Once the final selection is made,
it is easy to feel like the hardest part of the
private label process is past, like the rest of
the process is merely going through motions
until the sales begin rolling in. However, it is
vital that each part of the private label journey
is taken as seriously as the product research
process. One piece of this process that is often
overlooked is the process of choosing suppliers.

Many sellers attempt to contact just a

handful of suppliers for their product
and choose of the first ones they speak
with. Potentially putting their business at
risk later on or making these much more
expensive or difficult for their business.
Choosing an excellent supplier has the
potential to be as important as choosing the
right product. A supplier can impact how
well your product sells with the product
quality, how much startup capital you need,
how tight your cashflow is, how secure your
business is, and many other key factors in
your business.

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The Power of Many www.getwsodo.com

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One of the biggest mistakes a new seller can make is only reaching out to only a few suppliers. The
process isn’t nearly as exciting as the product research process, sometimes it requires you stay
up late to get in contact with Chinese sellers, it requires you to step outside of your comfort zone
and negotiate with people from an entirely different culture. However, as a seller it is your duty to
contact as MANY suppliers as you can. This can benefit you in many different ways.

1 You learn everything about the product. Once you begin getting quotes
you’ll get a much better idea of what a realistic price is. If you contact only a
few suppliers, and each one quotes you way higher than normal, you might
be convinced that’s a normal price and not negotiate too far down. However,
contacting a large number guarantees you’ll get a good idea of how much you
should really be paying, and most of the time you can push suppliers to match
the lowest quote you received from any other supplier. In addition to this,
when you begin asking different suppliers about how their product is different,
or ask for certain specifications, you begin to learn the exact ins and outs of
your product. Whether it’s the material, the weight, or the different uses, talk to
enough suppliers about your product and you’ll be a master on it in no time.

2 You begin to master the process of negotiation and supplier research.

We’ve already expressed how vital choosing the right supplier is. Once you
begin adding new products to your product line, you’ll need to repeat this
process and being able to do it effectively will allow you to create a cohesive,
thriving brand with consistent product quality. Learning this process is a
powerful skill to master and will help you grow your business much quicker.
After successfully generating cashflow from your first product, being able
to efficiently do this will allow you to pump out products much quicker and
effortlessly load the bases.

3 You greatly increase the odds of choosing the best supplier. This is a
running theme throughout our private label journey. On many of my private
label products I didn’t get quoted the best price on my first supplier or even
my fifth. Just like the product research process, the more suppliers we talk to
the higher the probability of choosing the best one. Let’s go back to the bag of
chips example. Imagine you’re given a bag of poker chips, each representing
a different supplier, and each chip has a rating of 1-10. A score of one means
that supplier is guaranteed to make sure your product fails and you remain

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at your 9-5, and a score of ten means that you’re going to get a price and
product quality so great that your product will make you $100,000 in the first
year. What are the odds of choosing a good supplier if you only reached in
three times or even five times? If it just means a little extra work and time, you
should absolutely be willing to reach into the bag as many times as possible.
Odds are if you’ve got 20 of those chips in front of you to choose from, you’re
going to have a good chance of picking a great one.

The Key Factors

There are 5 main factors that we use to choose the best supplier. Each one can play a major
role in how your product performs in Amazon’s marketplace. Use these in combination with
the “Supplier Contact Book” in the Product Concept Workbook we’ve provided to make the best
decision when choosing which supplier to begin a long and thriving business relationship with.
Each factor has the potential to be a major competitive advantage against other sellers in your
niche, so choose carefully.

1 Price – This obviously has the potential to be the most important factor. If
you’re overpaying and have to charge a high price just to keep your margins
reasonable, you might be shooting yourself in the foot before you start. Most
customers consider price the key factor in their purchase decision. If you’re too
easily priced out your product has the potential to never get off the ground. On
the flip side of this, a great price can give you far more tools than you realize.
While having the freedom to charge a lower price is obviously a massive asset,
having room in the profit margin can also be huge for driving sales in other
ways. Even getting $0.25 less on your price can mean far more wiggle room for
marketing strategies. A great price can give you room in the profit margin to
run discounts, Facebook advertising, aggressive PPC, inserts to drive reviews,
or any other number of tactics that would normally cripple your profit margin
with a bad product price. Make sure to use the Negotiation PDF we’ve provided
you to get the best quotes possible.

2 Quality – This has great potential to be a major competitive advantage and can
be the key differentiatior for your product. Customers notice product quality
and have a better sense for a quality product than many sellers think. Request
samples, images, and explanations for why a suppliers quality is unique.
Product quality can shape your branding and drive your profit margin. Some

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sellers think it’s okaywww.getwsodo.com
to ignore quality all together and think they can get away
with slapping their brand on some crappy knock-off. We know from experience
that’s not how you build a business from the ground up. Any supplier you
are seriously considering make sure you get a sample and have thoroughly
checked the quality.

3 Production Time – The time it takes to have your product ready to ship is
far more than just how long you have to wait before you can start selling. As
your business grows and expands, production time plays an important role in
your cash flow. If a supplier has a very long production time, this means you
have to order far more inventory at once. If you have to order inventory for 6
months instead of 3 months, this means you’re tying up the money for an extra
3 months. This is money you could be using to launch a new product. How
quickly you turn over your inventory is how quickly your business will grow.
Remember aside from the first order, a low MOQ doesn’t help much when it
takes 3 months to produce the product. Make sure you ask each supplier how
long the production time is and if it is longer than normal ask why.

4 MOQ – Minimium Order Quantity is also a factor that can greatly impact
whether or not a supplier is viable. This can have a similar affect on cash flow
as longer lead times. High MOQs also can cause significant problems when
working with your first product. Having to order more initially will mean more
start-up capital and thus more risk. Keep in mind that suppliers view MOQs
and price as inversely related. They charge less for higher quantities because
their raw materials also have MOQs. Their prices for materials go up when
they buy less so when you buy less their margins shrink. This means that if
you found a supplier you really like, and they already have a decent price, you
might be able to bring down the MOQ by agreeing to take on a higher prirce.

5 Communication – Often an underrated variable when considering which

supplier you’d like to stick with. Communication can be more important than
you realize. Having a supplier that responds quickly and in good English
can make things run considerably smoother. In addition to this, excellent
communication can often be a sign of how serious the factory’s operations are.
Some factories can be surprisingly small, and while this isn’t always necessarily
a bad thing, economies of scale from big factories usually means better prices
and better quality. So pay close attention to how quickly the factory responds.

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Conclusion
USE THESE 5 CORE CRITERIA IN COMBINATION WITH
“THE POWER OF MANY” MINDSET TO RESEARCH AND
VET A LARGE NUMBER OF POTENTIAL SUPPLIERS.

When done right choosing the right supplier can provide you a major
competitive advantage in your product market and make it significantly
more likely that your first product finds enough success to build your
brand on. While finding the right product and supplier aren’t the most
exciting part of the private label process, they can often be the difference
between finding a product to start a business around, and burning a few
thousand dollars before slinking back to your regular career path. Take
this process seriously, and it will pay massive dividends in the not too
distant future.

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CONTACT US

Tim Sanders

privatelabelmasters@gmail.com

PrivateLabelMasters.com