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How To Find Acceptable Online Ebay Vendors: A Survey Method

Updated on April 21, 2012
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As previously discussed, a major problem facing any retail business is finding acceptable vendors. Being a small startup online business, vendors must be located that allow the greatest possible flexibility for the small business owner. A fourteen question survey was created to assist with this process. Although there are no correct or incorrect answers, more favorable answers do exist.

As seen in Figure #1, the first three questions merely deal with vendor identification. Name and type of goods are fairly standard and obvious questions. The vendor location many become relevant during tax season. In some instances, states impose a use tax on certain items and goods if they are obtained from within the same state. This would only apply if the vendor and retailer are located within the same state, and of course would vary according to state law.

Continuing with the vendor survey, it would be extremely helpful to know if this particular vendor is also the manufacturer of the goos that will be sold. Many advantages exist when a reseller is purchasing directly from a manufacturer, and usually pricing is better. Unfortunately, in most cases, hefty order minimums are imposed. In some cases, vendors require resellers to have a certain amount of stock on hand before they will even consider selling to a company. This may pose a large problem for a startup business that simply cannot afford to keep stagnant stock on shelves. On particular example is that of being an “Authorized Repair Center” for certain products. In order to be authorized, companies must keep a certain amount of stock on hand, and represents a rather large investment on the part of the business owner.

When negotiation with vendors, many may require a minimum when placing an order. This can be either in total cost of goods, or purchasing in minimum quantities. Again this may pose the problem of investing a lot of money in stock. Generally, the lowe the minimums, the more approachable a vendor will be. Unfortunately in the cut throat world of online sales, other companies may also find the same vendors, and one might lose their competitive edge.

Payment terms also play a key role when deciding whether or not to do business with a particular vendor. If the vendors allows a reseller in store credit, then it will give the reseller the opportunity to receive the items, and sell them before actually having to pay for them up front. This may be risky, as the business is still responsible for the cost of goods regardless of whether or not they sell. Vendors with 30 day payment terms would be more desirable than those that must be paid upfront for items.

In the grand scheme of things, pricing is probably the deciding factor when determining the Feasibility of dong business with a vendor. If a reseller can purchase widgets from company X for $1.00 each, and from company Y for $2.00 each, ceteris parabus, the reseller would go for the better bargain. It simply does not make sense to purchase items at a higher rate.

The final component to considering a vendor is their shipping arrangements. Is the cost of shipping based on order cost, or actual weight? Could the vendor waive the shipping charges if a minimum purchase is made? Would it be more cost effective to simply pickup the item from a particular location? How long will it take to receive the order? These are all good questions that weigh heavily on the overall cost of doing business with a vendor.

The ultimate arrangement would be for the vendor to actually drop ship, or ship the item directly to the reseller's purchaser. Many vendors will do this, but require an additional cost of handling. If no minimums were required, this would be the preferred method of ordering, as the reseller would not even have a need to add the item to their inventory, or incur shipping costs to ship to the end user.

Overall, it is difficult to apply a mathematical points system to a survey that would be as detailed as a vendor survey. Many things must be taken into consideration before ordering items, but at least with a survey, everything can be laid out in the open for a reseller to make an informed decision. In addition, this would allow the reseller to draw direct comparisons from vendor to vendor. For example, if two vendors offer the same pricing, but one offers free shipping with no minimums, then that would be the preferred vendor over a company that offers the same pricing with a minimum of five thousand units and would also charge for shipping.

With information in hand, it is possible to make an informed decision when considering vendors. In most cases, vendors are upfront about their policies, and it certainly doesn't hurt for a reseller to know them in great detail. In fact, many vendors host some of this specific information on their website, allowing a survey to be completed by the reseller without even needing to make a phone call!

Sample Survey

Vendor Survey

Vendor Name:

Type Of Goods:

Vendor Location:

Manufacturer (Y/N):

Minimum Stock Required (Y/N):

Minimum Order Cost:

Minimum Quantity Requirement:

Payment Terms (In Advance/10 Days/30 Days):

Pricing (Wholesale/Resale):

Shipping Costs (Weight/Order Price):

Shipping/Order Lead Time:

Pickup Feasibility (Y/N):

Drop Shipping Available (Y/N):

Fee For Drop Shipping (Y/N):

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