We're an online supplement reseller, just due to the nature of the products we sell ie supplements, energy drinks and functional foods, things go bad and things expire which is a loss for us. Something we've recently started doing, especially with newer brands is working with them on more of a consignment basis. Where as sometimes I may be hesitant to bring in a new brand without a track record of sales or a lot of name recognition as I'm worried it won't sell well and we'll be stuck with the inventory, we'll have the brand send us like a case of each product, we'll promote them on our regular weekend sales, what sells sells, if it looks like a promising brand we keep it, if not we cut things off pretty quickly and send them back their inventory and we only pay for what we sell. This helps get these brands exposure as we have a combined email list of over a million plus a large social media following so the brand gets exposure and we get a chance to try out a new brand without the committment of buying inventory.
Your suppliers are not just vendors, they are partners in your success. If you want to increase your profit margin with these suppliers, find a way to further your partnership for a mutual benefit. Can you feature them in one way or another. For example, we have a vendor who acts as a partner and contributes to our monthly user. If you want better margins, don't just take-take-take but find a way to grow together.
Absolutely. Negotiation is all about finding a win-win. One instance - we were launching a new product. Tight budget, tight timeline. Our standard supplier's costs - too high. Couldn't make the margins work. So, we opened the discussion. Real talk. Showed them projections, potential for volume sales, long-term relationship benefits. Transparency was key. We negotiated reduced costs for an increased volume commitment. Also staggered payments to ease cash flow. It was a strategic move. They got volume; we got better margins. End result? Product launched successfully. Profit margin improved by 15%. Supplier got more business. Textbook win-win.