Your business’s supplier is essentially one of the main things that determine the costs you’ll be facing, the impact of your product, and finally, your overall profitability in the long run.
This means that the relationship you have with your material supplier is one that could potentially ruin your business or conversely, take it to great heights.
Due to the stakes being so high, we’ve put together a list of all the most important things you should look out for when finding the supplier you’ll be working with for extended periods of time, and if you keep reading you’ll learn how to do it while also minimizing your losses.
A lot of things should be taken into consideration when looking for the company that will help you run your business, ranging from the price to the overall capacity they have and whether it aligns with your own capacities.
When choosing your supplier, the price they’re offering on their product is one of the main things you should be considering.
However, this doesn’t exactly mean that the lowest price is also the best value you’ll be getting, and instead, you should try to find a balance between low price and high quality, so don’t give up until you’re satisfied.
There’s nothing wrong with shopping around for a bit, and even if you’re given a solid deal, there’s no point in accepting it if you’ve still got other options.
In fact, even then, you can still renegotiate your contracts in order to get a better price on the product/service you’ll be receiving.
You should also try to strategize your orders in a way that’ll allow you to save money on the shipping fees while also making use of the price breaks that can happen when you reach a certain quantity of an item.
Much like with the price, paying more doesn’t mean you’re getting the highest quality materials on the market, but rather, you’re buying from a vendor who’s got a good grip on the market.
Don’t let this discourage you though, as you can ALWAYS get a better deal, even when your choices are narrowed down to only a few suppliers.
Carefully navigate your way through the negotiation process in order to get the best price while also not losing out on quality, and if your team finds that the material/product has gone down in quality while the price remained up, don’t hesitate to cancel the contract you’ve signed.
You can make sure you’re getting the most bang for your buck by doing regular inventory checkups as well as tests on the same product/material from different suppliers in order to determine whether any changes are due.
Having a solid relationship with your supplier is key to running a successful business, and no relationship ever succeeds without sufficient communication between both parties.
Make sure that the supplier you’ve chosen is willing to communicate with you regarding any issues or mishaps that may happen during the shipping or production process.
If you’re familiar with each of your suppliers’ representatives things will get a lot easier, and you should always have a reliable way to get ahold of them if things go south.
A good way to test your supplier’s communication skills is to keep track of their ordering, e-mail, and phone response times, and if they’re punctual enough, it may be the start of a mutually beneficial business relationship.
That being said, you should always remain transparent regarding what you’re looking for in the product you’re buying from your supplier, and if you’re able to give them solid feedback, they’ll definitely pay it back when the time comes.
Finally, make sure that the supplier you’ve opted for is in good financial standing, as the last thing you need is to lose your flow of materials at the worst time possible.
Most suppliers will do a credit check on the company they’re planning on doing business with, and there’s nothing preventing you from doing the same thing, as it’s nothing more than common courtesy.
Big upfront deposits should always be a red flag, and if a supplier demands you make one, remain extremely cautious, as it could mean they’re in a tough spot, financially speaking, and are using your orders as a means of keeping their company above water.
Because of this, you should always be aware of your supplier’s return and refund policies, as well as any other financial rules they may have created.
Finding the right supplier for your business can be tough, but it’s not without reward, as having a reliable flow of products will ensure that your business is always operating at maximum capacity.
Striking a balance between price, quality, and reliability is key, and if you manage to do all of those, you could form a long-term business relationship that’ll be mutually beneficial to your and your supplier’s company.