The best suppliers will provide the most suitable goods or services at the right prices and within the right time frames for your business needs. Below we give you six factors you need to know when considering a new supplier.
Finding a Supplier
A great place to start is generally online. This is one of the best ways to locate suppliers such as manufacturers and wholesalers. Attending industry events and roadshows is another great way to find suppliers, allowing for you also to really get a feel for their products and services. You can also use your own business networks such as looking at the competition.
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Negotiating Price and Value
This is critically important. If you are in a new business, a key consideration for choosing suppliers may be affordability. If you are focused on managing your finances, competitively priced suppliers are an attractive option. However, cheap does not always represent the best value for money. If the quality of your supplier’s product or service is poor, you may incur extra costs for returns and replacements, and risk losing business with any delays that result. If you decide to pass poor quality products on to your customers, you risk damaging your business’ brand perception.
Reliability should be another key consideration for choosing suppliers. Reliable suppliers deliver the right goods or services on time, as aforementioned. Large suppliers are generally reliable because they have enough resources and systems in place to make sure they can still deliver if anything goes wrong. However, you can often develop a closer relationship with small suppliers, especially if you are their main customer. In these cases, your supplier may also respond better to different requests, such as expedited orders or holding on to inventory stock for you.
When finding the right supplier, look for experienced suppliers who have been in business for a long time. Stability is important, especially if you are entering into a long-term contract with a supplier or they are the only supplier of a particular item you need for your business. Another great tip is to check the supplier’s credit history to see if they are financially stable. It is also equally important and worth finding out what businesses have used a particular supplier’s services and asking them for a reference.
Think about location when choosing suppliers. Dealing with distant suppliers might mean longer delivery times and extra freight costs. If you need something quickly, a local supplier might be a better option. But be sure to investigate freight policies of distant suppliers. Bulk orders, for instance, might get you free shipping or you might be able to combine different orders to reduce costs.
Lastly, does the supplier have the same values as you to compliment your brand? If yes then it will make for better supplier partnerships to create a win-win situation for all parties.
Once you have a list of potential suppliers, ask them for written quotations and, where appropriate, a sample of the items you need. You can then compare their services to see which suppliers are the best fit for your business.