Suppliers are an integral part of the business ecosystem, assisting your venture in procuring items at favourable prices. Suppliers provide tangible supplies and banking, utilities, property, internet, phone services, and insurance.
Supplier Selection
Exploring and selecting reliable suppliers could be time-consuming but crucial in delivering quality services/products to your customers and maintaining sufficient inventory.
Before choosing a new supplier, use the following tips to align with your business needs.
- Supplier Research: To find suitable suppliers for your business, try online wholesalers, industry events, forums, industry association websites, or personal recommendations.
- Choosing Suppliers: Once a list of potential suppliers is in place, you should evaluate them based on their services, offers, and strengths.
- Price: While a low price seems attractive, ensure it doesn't compromise the product/service quality.
- Reliability: Ensure they can deliver tasks on schedule.
- Supplier Size: Large suppliers usually have robust backup plans, but smaller suppliers may offer opportunities for closer relationships.
- Stability: Consider how long the supplier has been in business; their experience might benefit your business.
- Location: Choose local suppliers for quicker deliveries, as far-flung suppliers may result in longer delivery times and higher freight costs.
- Supplier history: Review the supplier's past performance by asking for references and checking them.
- Contract Negotiation: Once you've decided on a supplier, it's time to negotiate a contract. The contract should include terms about rights and responsibilities. It's better to include delivery times, payment terms, and quality of goods in this discussion.
- Maintaining Supplier Relations: Developing a professional and productive relationship with suppliers is essential. Setting up periodic communication, discussing issues openly, listening actively, providing and receiving feedback, and keeping track of supplier's performance can help build this relationship.
- Reviewing Suppliers: Evaluating your supplier relationship and making necessary adjustments constantly is essential. Business priorities shift over time, and you might need to change suppliers or renegotiate the contract.
- Resolving Disputes: Disputes are inevitable in business relationships how you handle them matters. A systematic approach can resolve issues amicably: verify the contract, contact the supplier, understand their perspective, and keep records for future reference.
Remember, it's important to make calculated decisions when selecting suppliers and switching from one to another. You should always compare and assess the benefits before making a switch. Renegotiating contracts with current suppliers might be more cost-effective than building new relationships.