--- title: "How do you check supplier dependence before buying an ecommerce or Amazon FBA business?" url: https://firstpassmemo.com/answers/how-to-check-supplier-dependence-before-buying-an-ecommerce-store/ updated: 2026-10-28 publisher: FirstPass Memo (hello@firstpassmemo.com) --- Answers # How do you check supplier dependence before buying an ecommerce or Amazon FBA business? Short answer: Ask which supplier makes each product and what share of sales each supplier accounts for, then ask for the purchase orders, terms and contact details. If one supplier makes most of what sells, confirm before closing that they will keep supplying you on the same terms, and price in a backup supplier if not. Updated 28 October 2026 · Figures checked against their sources on 28 October 2026 · By Joan Murphy (https://firstpassmemo.com/about/joan-murphy/) (pen name) · How we check (https://firstpassmemo.com/methodology/) · Corrections (https://firstpassmemo.com/editorial-policy/) ## Check a listing now, free FirstPass Memo offers a free red-flag checker for business-for-sale listings and a $79 first-pass memo on a specific listing you send, paid after delivery. Paste any listing below for payback, the asking multiple and its red flags. Nothing you paste leaves your browser. Open the full checker (https://firstpassmemo.com/checker/) to unlock every flag with its seller question. Only know the price and monthly profit? Put them in the link and the check runs on its own: firstpassmemo.com/checker/?ask=45000&profit=1500 (https://firstpassmemo.com/checker/?ask=45000&profit=1500&via=box). ## What is supplier dependence? Most small stores and Amazon FBA businesses do not make what they sell. A manufacturer, often overseas, makes the products, and the seller holds the relationship. If one supplier makes most of the products that sell, the business depends on that supplier staying willing, on time and on the same price after the sale. Listings rarely say who the supplier is or what share of sales it accounts for. ## What should you ask the seller for? - A list of products with the supplier for each and each product's share of sales for the last 12 months. - Purchase orders and invoices for the last year, with unit costs, so you can see whether prices have moved. - The written terms with each main supplier: minimum order, lead time, payment terms and any exclusivity. - Who owns the product designs, molds, packaging files and brand registrations. If the supplier owns the molds, another factory cannot easily make the same product. - Whether there is a backup supplier and whether it has ever filled an order. - Whether the supplier knows the business is for sale and has agreed to work with a new owner. ## What are the red flags? - One supplier makes most of what sells, with no written terms. Our rule of thumb mirrors the one for customers: above about a quarter of sales from one supplier, treat the relationship as part of what you are buying, and confirm it before closing; see customer concentration (https://firstpassmemo.com/answers/how-to-check-customer-concentration-before-buying-a-website/). - The seller will not name the supplier until closing. You cannot check what you cannot see; ask for an introduction call during due diligence. - Unit costs that rose recently while the listing's margin uses older costs. - The supplier owns the molds or the product listing. - The supplier also sells the same product on the same marketplace. - The business also depends on one marketplace, so it has two single points of failure; see depends on one platform (https://firstpassmemo.com/flags/depends-on-a-platform/). ## How do you price the risk? Work out what happens if the main supplier stops or raises prices: how long until a new supplier can ship, what the first order costs, and how much stock you would sell out of in the meantime. Then reprice, hold back part of the price until the supplier has filled your first order, or both. Stock on hand matters too; check it with the FBA inventory price check (https://firstpassmemo.com/tools/fba-inventory-price-check/). ## What does a composite check look like? This is a composite example, not a real deal. An FBA brand lists $4,000 a month in profit, asking $100,000 plus inventory. One factory makes the three products behind 85% of sales, there are no written terms, and the factory owns the molds. The buyer asks for an introduction call, which confirms the factory will keep supplying but at 6% higher unit costs from next quarter. The buyer reprices on the higher costs, about $3,600 a month in profit, and agrees a $10,000 holdback released once the factory has delivered the first order placed by the new owner. Run the listing through the free red-flag checker (https://firstpassmemo.com/checker/) first, then work through the Amazon FBA due diligence checklist (https://firstpassmemo.com/answers/due-diligence-checklist-for-buying-an-amazon-fba-business/). ## Frequently asked questions ### Should I talk to the supplier before buying? Yes, once you are under a letter of intent and the seller agrees. A short call confirms the supplier knows about the sale, will work with you, and what prices and lead times to expect. ### Does the supplier relationship transfer with the business? Not automatically. Most small stores have no transferable contract with their supplier, so the relationship transfers only if the supplier agrees. Put the introduction and any agreed terms in the purchase agreement. ### What if the business uses print-on-demand or dropshipping? The same check applies, and the dependence is often higher: the supplier ships to your customers, so delays and quality problems land on your reviews. Ask for the supplier's order and defect history. ## Sources - FirstPass Memo, red-flag checker rules (https://firstpassmemo.com/flags/), our own rules, published as /rules.json - FirstPass Memo, seller question bank, October 2026 (general checklist) (https://firstpassmemo.com/get/seller-questions-general), our own questions - FirstPass Memo, free buyer calculators (https://firstpassmemo.com/tools/), our own calculators; the formulas are on each page ## Related - Free red-flag checker (https://firstpassmemo.com/checker/) - Amazon FBA due diligence checklist (https://firstpassmemo.com/answers/due-diligence-checklist-for-buying-an-amazon-fba-business/) - Ecommerce due diligence checklist (https://firstpassmemo.com/answers/due-diligence-checklist-for-buying-an-ecommerce-store/) - Red flags when buying an FBA business (https://firstpassmemo.com/answers/red-flags-when-buying-an-amazon-fba-business/) - How to check customer concentration (https://firstpassmemo.com/answers/how-to-check-customer-concentration-before-buying-a-website/) - FBA value with inventory (https://firstpassmemo.com/answers/how-much-is-an-amazon-fba-business-worth-with-inventory/) - FBA inventory price check (https://firstpassmemo.com/tools/fba-inventory-price-check/) - Red flag: depends on one platform (https://firstpassmemo.com/flags/depends-on-a-platform/) - Glossary of listing terms (https://firstpassmemo.com/glossary/) - More questions buyers ask (https://firstpassmemo.com/answers/) Composite examples are invented and labelled. Figures from other sites are quoted with a link and the date we read them; FirstPass figures are asking prices and seller-stated profit, not sale prices. Informational screening only, not investment, legal or tax advice. ## Looking at a specific listing? Get a full memo — $79, pay after delivery. Paste the link; your memo arrives within 24 hours (Mon–Fri). $79, pay after delivery: we send the memo first, then a payment link. Human quick reviews cost $199–$390. --- FirstPass Memo is informational screening, not investment, legal, tax, accounting or valuation advice, and not an audit. Seller figures are not independently verified. HTML version: https://firstpassmemo.com/answers/how-to-check-supplier-dependence-before-buying-an-ecommerce-store/