All the wholesalers have to decide the plan of actions for sourcing their wholesale supplies from the reliable sources. They make this decision according to the exposure they can take. This decision revolves around choosing between a single strategy to outsource wholesale products and the strategy of outsourcing wholesale products to the multiple suppliers. This decision is also dependent on stability of environment. Single outsourcing strategy is a powerful approach for the wholesalers to follow in stable environments mostly.
Some times wholesalers stick to a single wholesale supplier because the products in which they deal in are manufactured by a single supplier. But most of the times wholesalers have to make a choice to stick to a single wholesale supplier or to depend upon multiple vendors dealing in more than one products. There is nothing right or wrong in choosing between a single and multiple suppliers when sourcing products for Amazon. It depends upon the strategies devised by the wholesalers and the trust and confidence between the vendors and the wholesalers. Wholesalers should ponder on the pros and cons whether to stick to a single supplier or not before making this careful decision.
When your wholesale supplies are highly technical which require a lot of effort and administrative costs to qualify the work of a multiple out sourcing suppliers, outsourcing to a single supplier is always beneficial. Sticking to a single wholesale supplier requires less administrative costs and mental exhaustion. Another advantage is when you outsource to a single wholesale supplier it’s easier for you to build trust in a single vendor.
Single negotiation partner helps you to deal with him efficiently and thus increases your credibility in the eyes of your suppliers. In addition to that, by outsourcing to the single suppliers, retailers will be in a position to maximize their operating leverage based on total quality. Formal outsourcing procedures like delivery, buying process etc are same for a single supplier and they are less exhaustive for the wholesalers as they become used to them due to repetitive purchasing.
There is an inherent risk involved in sticking to a single supplier. If your suppliers business faces any set back or it is liquidated or closed due to any reason, your entire wholesale business will also suffer and can even result in closure of a business. So, outsourcing to a single supplier does not diversify your risks as you are putting too many eggs in one basket only. Meeting the deadlines is very important in a wholesale business as it creates good reputation of you.
If you rely on single out sourcing strategy, there is a probability, he may not cope up with the work loads and you will be unable to meet your deadlines. Another disadvantage is that it can create the shortage of wholesale products. If you depend on a single supplier and he runs out of stock you will lose your valuable customers. Depending on multiple suppliers lets you to source your wholesale products to any one of them. Depending on the single vendor outsourcing strategy also results in less flexibility and less power of price negotiations with your suppliers.