No matter what niche your business occupies, it’s going to depend on suppliers to turn a profit. Choosing and negotiating with these businesses effectively requires careful consideration of a number of different factors, weighed against each other according to your specific goals and priorities. While different businesses call for different aspects of suppliers, here are a few universal things you need to think about.
Service Standards
Whatever you need to buy, your business is going to be highly dependent on the performance of the business that’s selling it. When you first set out looking for suppliers, the standard of service is an exceedingly important thing to consider. The best way to judge this is networking with non-competing businesses who have bought from the prospect in question. Ask about the effect of their fill rates, their late orders, how long they took to resolve an issue, their system for importing invoices, and anything else which could have a big impact on your business’s bottom line.
It’s also important to consider how these factors will impact your overall customer satisfaction. Sure, a prospect may have some rig mats for sale which are affordable and of a great quality. However, if they can’t deliver on service, you could be shooting yourself in the foot by entering a contract with them.
Quality of Products
Here, I’m not only talking about the company’s adherence to specifications, but also whether the products they ship are packed and labelled adequately, and contain all the marketing materials you’ve agreed on. The majority of business owners know how to look for these kind of metrics, but many are a little shaky on measuring how well a given supplier actually meets them.
Of course, you may be able to get some pretty considerable discounts by buying from a vendor that’s a little shoddy on packing and auxiliary materials. However, before you clutch at these kinds of savings, it’s essential to consider how much the business’s shortcomings will cost your business. Make sure you’re not only paying attention to the various quality factors in a prospective supplier, but figuring out ways to measure how these will impact your business.
Alignment with Customers
This is another important factor to consider in the process of choosing suppliers, yet countless business owners manage to neglect it, and suffer serious consequences. Yes, one of your vendors may be a big name in their given niche, and the quality of the products they’ve been sending you may have been consistently great for years. However, if the major decision makers at the business never even bother to visit your premises or otherwise check up on you, it may not be smart to stick with them.
The best suppliers will look at you as a business partner, rather than just another cash cow they can milk. If you enter a contract with an industry giant, and they wind up taking you for granted, you’re going to be underwhelmed again and again by their level of service. When choosing suppliers, always consider the future quality of your relationship.
Photos: Falco, Unsplash
