Every business needs suppliers and vendors. They’re an integral part of the supply chain and without them a company can’t function well. This is why finding the right suppliers is an essential step in ensuring operational success and margin growth.
Technology is expanding the number of suppliers business owners can choose from, but not just any vendor will do. Unfortunately, sorting through a number of suppliers can be difficult. Here’s some advice that may help.
What to look for in a supplier
There are certain qualities that all good suppliers will exhibit. These include, but are not limited to:
A good supplier will offer goods at a fair price. This is often the determining factor when a business chooses suppliers, but don’t forget to RFP several suppliers to ascertain market rates and understand precisely what you are paying for.
In order to meet internal deadlines you’ll need to know when supplies will arrive, so your suppliers should be extremely reliable. A high quality supplier will ship the right number of items on time to guarantee its clients have the goods when they’re needed.
An unstable supplier will have problems getting the right items out at the right times. Established suppliers can often be more stable than new ones.
Location matters when it’s imperative that important supplies arrive to your office or warehouse on time. The further supplies need to be shipped to reach their destination, the more can go wrong. Consider shipping costs and logistics when inclement weather or production delays hit.
This is more of a catch-all than a single quality. Factors that go into determining a supplier’s competency include frequency of tech upgrades; well-trained, professional employees; solid communication; and much more.
Now that we know some things to look for in a supplier, let’s talk about how to find them.
Make the right supply chain connections
Networking is an important skill in many aspects of life, but nowhere is it more necessary than in the business world. Making connections with other businesses is important when you’re starting a new venture. These more experienced entrepreneurs can share advice, tricks of the trade, and introduce you to other businesses—including suppliers: manufacturers, distributors, independent craftspeople, or import sources.
Build relationships with them all. Not only will this increase their willingness to work with you, but it will also expand your network and influence. If one suppliers can’t keep up with your needs, someone in your network may know who can.
Research prospective suppliers
Supplier research can help you find a new supply chain partner when you need one. It can also help you vet a potential supplier that seems to check all of the right boxes. Here are a few key ways to find suppliers:
Search relevant keywords and see where it leads. Research online associations, trade and wholesale directories, or YP.com.
Attend trade shows
Trade shows are perfect arenas for locating suppliers.
Read trade magazines
Looking through trade magazines. Review ads or classifieds for wholesalers in your industry
Ask your network
Here’s where building a professional network comes in handy. You might not be able to ask your direct competitors what suppliers they use, but if you cast a wider net, you might find someone who can give you good information about a supplier. Also consider asking brand manufacturers or networking at local business events.
Once you’ve found a potential supplier, set up a meeting. Ask about pricing, terms, minimum and maximum order quantities, volume discounts, order processing time, or anything else you might possibly want to know. If they can’t meet your needs—or even if they have terms you dislike—keep your options open.
Revisit and renegotiate terms regularly
Don’t be afraid to renegotiate contracts with suppliers as your business needs change. This is less about finding new vendors and more about continuing to do business with the right partners.
However, asking potential suppliers about their renegotiation policies can let you know whether or not you should do business with them.
Suppliers need businesses as much as businesses need suppliers. If your supply needs have changed, you should be able to go to your suppliers and renegotiate amicably. This is good for both sides, as it often means increased business for the supplier and better rates for your business. Even if a reduction of supplies is necessary, a good supplier will understand and work with you.
It is often said that “preparation is nine-tenths of victory.” Finding the right suppliers for your business will go a long way toward ensuring long-term profitability and success.
This article has been edited.
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