Ecommerce and Entrepreneurship Blog | About | Contact | Store

Getting 100% of the Product Line: How to Ask a Supplier for More

Posted on February 27, 2008 by Archives

Approaching potential suppliers as a relatively new, rapidly growing, eCommerce company, we typically get one of three reactions. On one extreme, some suppliers will be more than supportive, willing to jump in head first and give us all available data and product they offer. We love these suppliers. Others are willing to take the eCommerce gamble, but with a limited stake in the investment; they give us some of their product offering and are mainly interested in testing the waters. The other extreme is a supplier who is typically an older brick and mortar company, that is in its fourth generation of ownership. They are uninterested in expanding into the unknown and are much more comfortable where they are. We understand where they are coming from… eCommerce can be risky business.

Since the first reaction is the best, and what we hope for in every prospective meeting, our data department is ready at a whim to tackle large projects and upload hundreds if not thousands of products in one sweep. The third reaction, though it does not happen frequently, does come up on occasion, and we cordially finish lunch, shake the suppliers hand, and walk away chuckling to ourselves. We just sat through an entire lunch with complete strangers, pouring their heart out about how they are ready for expansion; how they want to grow but cannot find the right opportunity – but when we present an opportunity to them, it is too adventurous.  It’s the middle of the line suppliers, the lukewarm suppliers, the “that sounds great but I’m too skeptical” suppliers that require a lot of time and attention by our supply chain management.

Now, I work in Supply Chain Management, not in data, analytics or marketing. So not only am I not an expert in search engine optimization, but I can barely describe the difference between paid and organic search results. However, I do know that if you have a site about plumbing, the more pages about plumbing that you have the more relevant your site will be.  This may not be the exact case but a simple example of this is as follows: When we have 15 Kohler products, we are more relevant in search engines than if we had 1. Let’s expand: If we had 15,000 Kohler products, we are more relevant in search engines than if we had 1,000. That makes sense. The more we have of a product offering, the more relevant we are to people searching for those products. Let’s go a step further. If we have 15,000 Kohler products and 15,000 Moen products, we are more relevant than if we just had Kohler products alone.

To transition this to sales, higher relevancy equals higher organic results, which equals higher volume of traffic on our website. We all know, higher traffic means higher sales. So, what we can do to increase sales? The simple answer…broaden our product offering. Sounds like an easy concept, right?

Explaining this to a supplier, especially a supplier that is interested in expansion, but not interested waiting the time it takes to develop good product descriptions and search engine relevancy, becomes a difficult task. We have often sat in meetings with lukewarm suppliers asking, “Why aren’t we selling more products?” We kindly try to explain, usually for more than the tenth time, that if they will expand their product offering, we will sell more of their products. Why? We will be more relevant in search results.

When we approach our suppliers, we come to the table realizing our core competencies as well as theirs. The relationship works best, when suppliers stick to their competencies, and let us stick to ours. If they give us the product, we will sell it. Our ability to sell their products is directly related to the breadth of the product made available to us.

So, how do we ask a supplier for all of their product offering? Simple, we run a report of their competitor that is giving us 100% of their product offering, and show them the difference in sales volume. If we do not already have a comparable product, the report generated would be of one of our competitors, offering a similar product line. This gets the results we are looking for every time.


blog comments powered by Disqus