Don’t wait until the final inspection – it is too late to discover this is a risky supplier after you spending $3000 on the down payment. Learn to smell the danger of a “risky supplier” and be decisive to walk away early.
Welcome to the Goodlife Warrior podcast, I’m Yuping. We make sourcing easy, fun and profitable for you. This episode was originally aired as a video on my YouTube channel. youtube.com/goodlifewarrior. As always high quality professional sourcing content delivered to you with passion and my unique Chinese accent, enjoy.
Hello, Sourcing Warrior friend. How are you? I hope your day is going great. If you are running an E-commerce business, I hope you never, ever have to deal with a bad supplier because it can get really expensive and is very, very stressful. So in this video, I’m going to give you some tips to see the early warning signs of a risky supplier. I think you’re going to like it.
If this is your first time visiting, I welcome you to this beautiful, Goodlife for your community. This is a place where you can find high quality sourcing content. I hope you stay and subscribe the channel. When it comes down to dealing with the supplier in general, if you’re smart, you’ll probably agree by the time that your product is finished, your supplier told you your shipment is ready and you send in an inspector to the factory to inspect your product. But found a bunch of defective product, is too late because you already committed to this chunk of money, the down payment to the supplier. It could be $2,000, $3,000 or $5,000, depending on the size of your order, the percentage you pay down. So, we got to have to move this timeline from the product is ready to before you pay them the down payment. We got to be smart enough to smell the risk and walk away if it’s needed.
First early warning sign, the supplier mislead the customer with a popular product image. If you look at the supplier store and their product catalog, you couldn’t even find this popular product. They’re just using this as a click bait to increase the customers inquiry rate. To me, this is such a cheap marketing trick. Instead of putting effort, presenting product, produced by themself. Instead, they steal other people’s product image, put it on their store front, wasting customer’s time. Do you think this supplier is trustworthy? I think is questionable. Second warning sign, the supplier redirect your trade assurance order. You identify this great supplier on Alibaba. They have a trade assurance pad and the communication with the supplier sales rep is so great, there are certain level of trust building among yourself. So, you’re ready to place your purchase order. Now the supplier sales rep suggest you place the order directly with the supplier instead through trade assurance.
What do you think? It really doesn’t matter for whatever reason he’s suggesting you place the order directly with the company. This put serious risk on you. The minute you leave Alibaba Trade Assurance, you will be on your own. If he take your money and run away, you will never find it back again. So when he suggest you place the order directly with their company, you should be smart enough to smell the risk, insist placing the order through trade assurance, or walk away. The third early warning sign, silent treatment, in my opinion it’s okay when the supplier doesn’t speak perfect English, they try hard, but they misunderstood you, but is not acceptable at all when the supplier neglect you, not to respond to your message. You can see several days passed by, they neglect you. That is a silent treatment, is not acceptable.
The reason this is a business risk is when your product fails the inspection, you desperately wanted to reach out to them and solve the problem. Guess what? You’re going to get silent treatment, is not acceptable because by then you already wasted so much time and so much money. Early warning sign number four, bad sample quality. When you request a sample, it could cost you 50 to $150 depending on your product. When the supplier sent you the product is supposed to represent the best out of their pile. If you see the sample, the quality sucks so bad. Don’t dream that you can work with this supplier, bring the quality up to your level of expectation, just face the reality. I don’t wanted to generalize this, but most of the time, the bad quality samples come from bad quality factories. So cut your loss. Do some work to find better supplier instead of being emotionally attached to this supplier you’ll find and try to work with them. You’re going to end up wasting a lot of time, maybe a lot of money too.
The last warning sign, to me that could be a deal breaker. That is when the supplier refuse factory audit. You and your supplier, you’re loving each other. The communication is going so well. You love the sample. You’re excited to place the purchase order, but at the minute you mention about the factory audit, they go quiet or simply refuse for you to see the factory. Wow. What do you do? Seriously, I have been sourcing for 20 years. Every time I say to my supplier, “I want to visit your factory.” They say, “When, we will arrange that.” But your supplier, “Who are you? Are you a trading company? Don’t have the access to the real factory or the factory is very messy, cannot be shown to the public.” What is your reason? If you cannot allow me in now, how do you expect me to send people in to inspect my product. When the supplier refuse the factory audit, I really don’t understand that, to me that is a serious risk because I’m going to give you money, put down my down payment, but I don’t even know what your factory look like, where your factory is.
That is a risk. In your E-commerce journey you’re going to encounter similar situations like this. The key is to be smart enough, to smell the danger and be decisive enough to walk away. In my Sourcing Warrior Mastermind Course Facebook group, there are always students asking questions about a particular situation, “Is this normal? Is this risky?” The good thing is I’m always there answering their questions and helping them solving the problem. I hope you appreciate this video and I hope you join my course so I get to help you solve your problem, building your business. Until then have a great, beautiful, remarkable, powerful day. I’ll see you in the next video.