One supplier or several for a growing merch business?

At some volume, every merch business meets the same question: should the whole line stay with one supplier, or should orders be split across two or more?

There is no universal answer — anyone who gives you one hasn’t seen your numbers. What I can lay out is the trade-off as it actually felt on the buying side, including the one situation that pushed me to multi-sourcing.

The five dimensions that actually move

Dimension	One supplier	Multiple suppliers
Unit cost	Usually better — full volume in one place, stronger position to negotiate breaks.	Slightly worse per piece at first; each supplier gets less volume. Improves if you shift share to whoever performs.
Consistency	Best case: one standard across the whole line. Worst case: one bad month poisons everything.	Each supplier is a different standard — more samples to keep, more specs to police.
Capacity risk	All of it on one factory. A good month can break your lead times.	A stock-out at one supplier is an order rerouted, not a store emptied. This is the strongest argument for a second source.
Relationship leverage	You matter less as volume splits elsewhere; you matter more as you concentrate.	Parallel quotes keep everyone honest — renegotiation runs on live alternatives, not hope.
Management overhead	One relationship, one invoice flow, one set of quirks to learn.	Double the communication, specs, samples and paperwork. Real cost, usually underestimated.

When single-sourcing is right

• You’re under ~a few hundred pieces per product per cycle — the overhead of splitting outweighs the risk it hedges.
• Your supplier has never missed a date and communicates in hours, not days.
• Your products share one construction (all acrylic, say) where one factory’s specialization shows.

When a second source starts earning its keep

• Volume has grown to where a stock-out costs real money. This is the trigger I’ve lived through: production promised for a peak week arrives late, and there is nowhere to redirect. Splitting the next cycle — even 70/30 — converts that from catastrophe to inconvenience.
• You’re re-quoting anyway. Growth means re-benchmarking price; if you’re testing a second supplier, you’re one small order away from being multi-source.
• Your products are diverging. Keychains with domes, magnets with different backings — different specializations often mean different factories anyway.

The middle path most growing businesses land on

Primary plus backup: one supplier gets 70–90% of volume, a second gets a small standing order or is kept warm with an occasional run. You keep the simplicity of single-sourcing with an escape hatch that’s actually tested — an untested backup is a phone number, not a plan.

The cost of that standing order is real. Treat it as insurance premium: you’re buying the ability to ship during your best month, which is exactly when a single source fails.

How to decide in one evening

1. Write down what a two-week stock-out before your busiest period would actually cost you. If that number stings, you have your answer about a backup.
2. Check your last three orders: did anything arrive late, or need chasing? Twice means the service curve is bending.
3. Price your best-selling design at your target quantity with one alternative supplier (same spec, same brief). Now you know what the insurance costs — maybe it’s nothing.

That third step — pricing one design elsewhere while staying perfectly happy — is the single healthiest habit I carried over from the buying side.