Finding a good supplier is essential to almost every business. Without any raw materials to make what you sell or manufacturers to provide the products that you resell, you will have a tough time growing your business.
Suppliers and vendors have a much more important role than you can imagine, besides the fact that they supply you with materials and products, they can also be important when it comes to information about the product market. They can also help with evaluating the potential of a new product, they can help you track competitor’s actions and identify new opportunities. In some cases, they can turn into partners, helping you cut costs and improve the product designs and even fund new marketing efforts. This is why it’s essential to make selecting good suppliers and vendors a part of your growth plan.
Let’s take a look a couple of steps that can help you find the ideal supplier:
First of all, you need to set your criteria
Make sure that you know what you need. Don’t be tempted by sales pitches that sound promising but don’t meet your requirements. Understand the difference between a strategic supplier – a supplier who provides goods and services that are essential to your business – such as valuable raw materials, and non-strategic suppliers, who provide you with low-value supplies such as office stationery. Here are a couple important when it comes to selecting your suppliers:
Lead times from receipt of your orders until they get delivered – it’s crucial for your business that you don’t get left without stock – not having enough stock of a popular item can make your business lose money – you will be missing out on sales and your regular clients might go shopping somewhere else.
Minimum and maximum order quantities – this is important because the larger the minimum order quantity, the more money you need to invest in stock upfront – meaning that it will take more time to recover the cost of the new stock.
Storage and handling facilities – you need to have the right facilities for the right types of transport – larger trucks need loading/unloading bays and heavier equipment to unload pallets of products.
Quality assurance – it’s important that you get what you pay for and don’t wake up with damaged products arriving at your warehouse – a supplier has to guarantee that the shipment of products will get to your warehouse intact. The quality of your supplies needs to be consistent – customers associate poor quality with you, not the suppliers.
Returns policy – will they take back old or redundant inventory?
What else should you be looking at when it comes to suppliers?
The most effective suppliers are the ones that offer products and services that match or even exceed the needs of your business. So when you are looking for suppliers, it’s best to be sure of your business needs and what you want to achieve by buying, rather than for what suppliers want to sell you. Let’s have a look at some other important factors when it comes to selecting your suppliers:
If the supplier lets you down, you will let the customer down – this can result in losing potential sales and damaging your brand image.
Value for money
The lowest price is not always the best value for money. If you want reliability and quality from your suppliers – it comes at a cost – you’ll have to decide how much you are willing to pay for your supplies and the balance you want to strike between cost, reliability, quality, and service.
Clear communication and prompt service
You will want your suppliers to deliver on time, or to be honest and give you a warning if they can’t. The best suppliers will want to talk to you on a regular basis to find out what needs you have and how they can improve their service for you.
Make sure that your supplier has sufficient cash flow to deliver what you want when you need it. What you can do, is to do a credit check to make sure that they won’t go out of business anytime soon.
A partnership approach
A strong relationship will benefit both sides – your suppliers need to find ways they can help your business grow – if your business grows, your demand grows à making the supplier more money as well. You want your suppliers to acknowledge how important your business is to them, so they make every effort to provide the best service possible.
Selecting your suppliers is up to you, but buying from the first supplier that you can find is a no brainer. The more work you are willing to put into research and finding the supplier that suits your needs, the more profits your business will make. Finding the right supplier is not an easy job but when you find the right supplier it can be very rewarding.