The 5 steps outlined in my guide on How Create A Profitable Online Store do not have to be completed in order. Some people like to work on getting their website up first. Some people choose to take care of all the legal issues ahead of time. And some people try to nail down their product sourcing strategy before doing anything else.

What usually ends up happening though is that most people save the product sourcing problem for last because it requires human interaction and an active effort to develop business relationships. Recently, I received this email from one of my readers who was a bit apprehensive about contacting their first vendor.

Photo by Star5112

Hi,
Just want to say thanks for the extensive information you provide on your site. I have found it quite valuable and encouraging.

I’m just starting out with my new venture and was hoping you could help? I have decided on the kind of product I would like to work with but I’ve come to a grinding halt at the thought of contacting my supplier. The kind of things that run through my mind are:
1. How do I approach my supplier e.g. what kind opening letter/email should I write?
2. Should I have decided on a company name and have my website up and running before I make contact with my supplier?
3. How do I deal with the question – How long have you been in business for?

So, I was hoping you could shed some light on the above and whether you have any samples of letters/emails you may have used in the begging when first making contact with your potential new supplier?

Be Up Front And Honest

The first point I want to emphasize is that your relationship with your vendor is going to be based on mutual trust and honestly so it is important not to exaggerate your current state of affairs. If you don’t have a website up yet, it’s not a big deal. If you haven’t been in business that long, don’t sweat it. Every successful business has to start from somewhere.

The important thing to realize is that there are a wide variety of vendors who cater to different classes of customers. And it’s essential to figure out if you and your vendor are a good match up front so that you don’t waste any time. For example for our wedding linens store, we are still considered a small fry when it comes to our purchasing volume so it wouldn’t make sense for us to contact a large linen manufacturer directly.

When I contact a vendor for the first time, I always prefer contacting them by phone rather than email. If possible, I try to arrange a face to face meeting, but of course this isn’t always possible. After the initial phone conversation, I always follow up with an email.

In general, I don’t use standard form letters because I purposely write my correspondence in a more personal tone based on elements derived from the initial phone conversation. Remember, you are dealing with real people here and you are trying to develop a relationship. I try to treat all of my vendors like I would treat an old friend or coworker.

Make An Educated Guess About Your Volumes

Assuming that you’ve already determined that the vendor you are contacting carries items that you would like to sell, I usually try to address the minimum purchase or volume question first.

Before you contact your vendor, you should already have an idea of how much you are willing to buy and how often. While this is a difficult question to answer if you don’t have any customers, the reality is that you need to make an educated guess and not be wishy washy about it. Make sure you get this out of the way first.

One time my wife and I spent a few hours talking to vendor only to discover at the end that their minimum purchase was something like 50k worth of merchandise. There are different vendors and distributors that deal with different classes of customers. Make sure that you are dealing with the right one that fits your business.

Once you’ve determined that your purchasing power is a match, the next question to ask is how soon the items can be sent and how they are shipped. If you are looking to carry your own inventory, you should ask about the lead times. If you are dropshipping, you should ask about how soon the products are shipped once an order is placed. You should bring up the payment terms as well.

Here are some other questions we like to ask. Depending on what you are trying to sell, you probably need to address more specific issues related to your niche.

• How long have you been in business?
• How large is your facility?
• What products do you specialize in?
• Who are some of your existing customers?
• How do you deal with product quality issues? Is there an easy way to return defective product?
• Can you provide product pictures?
• Can you provide samples?
• How do you prefer to communicate—phone, email etc…
• How easy is it to contact you? Do you return phone calls and emails promptly?
• Are you willing to do custom manufacturing of designs given sufficient quantities?

Since we deal primarily with overseas vendors, we usually have to pay a small upfront fee to cover the cost of materials and then pay the remaining balance once our products are ready to ship. Our lead times are typically 2-4 months.

Have Your Business License Ready

If you are dealing with vendors in the US, you may be asked for your business license. Having your business license ready to go allows you to purchase your supplies tax free. It also demonstrates to your vendor that you actually have or are trying to start a real business.

If you would rather not deal with any of the legal stuff first, that is understandable too. But just keep in mind that you will need to get your business license eventually and it usually costs under 100 dollars to obtain. Incidentally, if you are dealing with foreign vendors or suppliers, showing them that you have a business license isn’t necessary.

Do I Need A Website First?

There’s no real point in throwing up a website if it’s not ready. If you tell your vendor about your website and it’s empty or incomplete, then they may not take you seriously.

Once again, it’s best to be upfront and honest. You don’t necessarily have to say that you are just starting out. But it’s important to convey that you would like to feature their products for your business. You can always throw up a website later.

Vendors Are Just Regular People

If you feel intimidated by contacting your vendors, you need to remember that they are just people running a business and that they are in the same boat as you. It all boils down to establishing a good business relationship and finding the right fit. If a vendor is rude or doesn’t give you the time of day, then they are not the right fit for your small business.

Sure you can pretend to be larger than you are to get your foot in the door but the truth will come out eventually when you can’t afford the minimum buy. I can guarantee that once you find the right vendor, you will not feel intimidated at all.

As part of running our online store, we get requests from businesses all of the time that want to carry or purchase our items wholesale or in bulk. Some of these people greatly exaggerate their volumes and some of them pretend to be much larger than they really are to get discounts. In almost all cases, we do our due diligence and find out the truth one way or another.

The bottom line is that I’d much rather work with someone who is upfront and straightforward. You are trying to build a business relationship here, not just buy products. You need to know that you can depend on your vendor to deliver and they need to know that you will pay on time. The rest will work itself out.

Sorting Out The Various Vendors

Initially, my wife and I found it a major pain to find vendors who were willing to ship in the low volumes that we were comfortable with when we first started out. And we wasted a bunch of time cold calling vendors and sorting them out through trial and error.

If you ever find yourself getting fed up with the whole product sourcing process, keep in mind that there are services like Worldwide Brands that can save you time by sorting and categorizing a large database of vendors for you. You still have to develop the necessary business relationships but at least you won’t waste time contacting vendors who are out of your league. Whatever happens, don’t be intimidated. Rest assured that there exists a vendor out there that will fit your business needs.

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