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Do you need to find new vendors

Do you want to search out new distributors?

As part of a year-end or Q4 analysis and planning for an improved future, it’s not uncommon for retailers to start looking for new vendors. Now is a great time for looking at all your data from last year, especially from the holiday shopping season, and seeing if there are areas where you need to replace suppliers or find new vendors to better, more efficiently meet your customers’ needs. For the year to come of course, but especially for the next holiday season.

Step One: Determining if you need to find new vendors

Two reasons retailers should be looking for new vendors:

  • The last vendor didn’t fulfill like you expected. The first step is to scorecard and rate your vendors, identify who the laggards are and then meet with them to see how (and if) they can do improve. You already have the infrastructure in place, you had the plan written up, and trading partner intelligence can offer the data to develop a fact-based decision on what to do next and to prepare for that conversation. The result will be needing to replace the vendor or helping them create an improvement plan for the upcoming year. Be sure to identify specific milestones aligned with minor shopping holidays like Mother’s Day or Back to School to evaluate their progress in the year ahead.
  • You need new vendors or resources to support new product lines or category expansions. At EDI, we find that retailers often look for new vendors where there is a geographical driver. They’ve looked at the data to see where online shipments are being delivered and identified several regional clusters or even a city that saw a lot of traffic. This insight can help you understand whether you need a 3PL partner, drop ship capable vendors, a new warehouse, or even a store, to better serve your customers in those areas. Additionally the performance of your sales can indicate a need for additional or different vendors. Did you see any surprises or opportunities for growth during the holiday season? You can add more products, sizes, colors, etc. to that category, but does that mean you should add new vendors and new items altogether?

Using data and insight from your sales can help you evaluate your vendor needs, but there are other ways that might not always be so obvious. For example, consumers love to have their voices heard, so customer reviews are found everywhere online. Maybe the reviews focus on product quality issues, or maybe there are issues with fulfillment and delivery, problems that might not get shared with customer service. If people are writing reviews, whether positive or negative, take advantage of the information that they offer. They may shine a light on other ways you can make improvements, or even let you in on a product feature or service that you didn’t even know was important to your customers. Perhaps they want two-day shipping or a faster buy online, pickup from store option.

Step Two: How to find new vendors

Next, determine whether or not you need new vendors is only the first part of any vendor analysis. Depending on the route you take for finding new vendors, this could be either the easiest or hardest part of your quest to find new vendors.

After this point, you’ll have to actually go out and find the vendors to fill in the identified gaps, negotiate a contract, onboard them into your order system and finally getting them started with order fulfillment. The typical and traditional route for securing vendors is to do this all on your own, meaning that your time is spent collecting data by hand, your vendor discovery time will be significantly long and inefficient, and, your search results might not lead to a vendor that aligns well with your sourcing strategy.

Then there is the modern method for finding new vendors through a retail network, which automates much of the discovery process, vets vendors to remove misalignment risks, ensures vendors are highly aligned with your sourcing strategy, and delivers a fast onboarding speed to help you compete on time to market. Which seems like the better choice for the fast-paced rate of retail?

With a retail-focused network, retailers have access to tens of thousands of vendors and millions of SKUSs that are “plug-in” ready to integrate with their business. You quickly find vendors and 3PLs in the areas needed, with up-front information about product offerings, inventory, fulfillment capabilities, shipping capacities and more. Onboarding is much easier as part of a network, meaning your new vendor could be serving your customers within hours to days, instead of weeks to months. With the information and features offered by a retail network, you could save both time and money, while significantly increasing the chances of success for your new vendor partnership.

Retailers should always be looking for opportunities to expand their product and service offerings. There are always new vendors to add, new product lines to offer, and new fulfillment methods to explore. With the right information and the right connections, it can be as easy as identifying the need, connecting with the vendor and routing orders their way.

We help retailers find new vendors, source new products, and communicate with new trading partners quickly and more effectively. If you’d like more information on any of these solutions, please contact a sourcing expert today.

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