Inventory how-to
How to evaluate a new supplier
Evaluate a new supplier on four things: lead time accuracy, minimum order and case pack terms, defect rate, and communication.
Short answer: Evaluate a new supplier on four things: lead time accuracy, minimum order and case pack terms, defect rate, and communication. Run a small test order before committing real volume, and track the actual numbers against what they promised.
Start with a small test order
Do not commit to a full stocking order on the first try. Order a small quantity, close to their minimum, and treat it as a trial. This limits your risk if the lead time is wrong or the quality is poor.
Track lead time against their quote
Suppliers quote a lead time when you ask. Write down the date you placed the order and the date stock actually arrived. If they quote 14 days and it takes 24, that gap matters more than the quote itself, because it is what you need to plan reorder points around.
Check minimums and case packs against your sales pace
A supplier with a 500-unit minimum is a problem if you sell 10 units a month. Work out how many months of stock that minimum represents. If it is more than 3 to 4 months of cover for a slow mover, the terms do not fit your business, even if the unit price looks good.
Inspect quality and count on arrival
Check the received quantity against the packing slip and check a sample of units for defects. Partial or damaged shipments happen. Decide upfront what defect rate you will tolerate before you scale up orders with this supplier.
Compare landed reliability, not just price
A cheaper unit price is not a win if the supplier is slow, inconsistent, or hard to reach when something goes wrong. Weigh price against lead time consistency and responsiveness together before moving most of your volume to them.
Step by step
- Place a trial order at or near their minimum quantity
- Record the order date and the date stock arrives, compare to their quoted lead time
- Count and inspect the received stock against the packing slip
- Calculate how many months of sales their minimum order covers for this SKU
- Note response time to emails or questions during the trial
- Repeat for a second order before shifting full volume to them
- Keep a simple record per supplier so you can compare lead time and defect history over time
Worked example
A store trials a new supplier for a phone case with a quoted lead time of 10 days and a minimum order of 200 units. The store sells 10 units a day for this SKU, so 200 units is 20 days of cover, which is reasonable. The test order actually arrives in 15 days, not 10, and 6 units out of 200 are defective. The store decides to use a lead time of 15 days plus 3 safety days for future reorder points, and will re-test once before increasing order size.
How SteadyShelf helps
SteadyShelf does not evaluate suppliers or track defect rates, this is a manual process you run outside the app. Once you have a real lead time and safety days for a supplier, enter them in SteadyShelf and it will use those numbers to set order-by dates and suggested quantities for that supplier's SKUs going forward.
$29/month flat, unlimited products and suppliers, 30-day free trial. Run the numbers now with the free reorder point calculator.
SteadyShelf is launching on the Shopify App Store. Join early access to get the install link first.
Related guides
- How to exclude wholesale orders from your retail forecast
- How to finance inventory for a small store
- How to find products that are losing you money
- How to do cycle counts in a small store
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FAQ
What lead time should I use if the supplier's actual delivery varies a lot?
Use the longest lead time you have seen in your trial orders, not the average and not their quoted number. Add safety days on top to cover the remaining variability. If deliveries are wildly inconsistent, that inconsistency itself is a reason to look for a second supplier for that SKU.
Should I switch my whole order to a new supplier right away if their price is lower?
No. Move volume gradually after at least two successful trial orders. A lower price does not help if the supplier is unreliable and you end up with stockouts or damaged goods, so prove consistency first.
Let SteadyShelf do this math for every SKU
Order-by dates per supplier, seasonal forecasts and draft POs for your Shopify store. $29/month after a 30-day free trial.
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