When it comes to running a business, you must choose the right supplier. If you choose one that doesn’t provide high-quality products or isn’t reliable, you will struggle to offer well-priced goods/services that meet the expectations of your customers. In this blog, we’ll explain how to choose the right supplier for your business.
Set criteria
First of all, it’s crucial that you set the criteria that you expect a supplier to meet to provide what you need. Here are some things to consider:
Lead time
Dropship capability
Quality assurances
Payment terms/conditions
Return policies
Communication standards
If you take the time to set the criteria in advance, you can evaluate potential suppliers to make sure you don’t overlook anything.
In addition, decide which criteria are flexible and which are non-negotiable. Since suppliers all operate slightly differently, there is a chance you may not find one that perfectly fits your criteria.
Weigh your options
If you know what you want to sell, try a supplier directory to see which ones offer what you need. You can then evaluate suppliers based on the following:
Reputation
Your business model
Security
Also, be sure to check reviews from other businesses to get a better idea of how the supplier will meet your needs and expectations.
Reach out to suppliers
Once you have a few legit suppliers that you are interested in working with, reach out to them for a bid. You may need to fill out an RFQ (Request for Quote) or RFP (Request for Proposal). When filling out the form, make sure that you include all of the standards you need. This is also the time you will be communicating with them regarding their policies and processes. Try to find out if they use risky re-ordering practices or get materials from unreliable sources. This will help you make sure you’re using a vendor with a reliable supply chain that won’t result in shortages on your end.
Evaluate bids
Once you have received the bids, take some time to evaluate them. Compare each of them to determine which ones meet your budget needs and quality standards. Make sure to pay attention to pricing, you don’t want a supplier that cuts into your profits.
You will also want to do another check to ensure that the supplier’s bid is valid. If working with a wholesaler or drop-shipper, request samples and documentation of ISO compliance. If you end up selling products belonging to another company- even if the supplier stole them, you are complicit in the fraud.
Monitor the supplier’s performance
Finally, no one wants to work with an unreliable supplier. Make sure that you are keeping tabs on them to make sure they keep their commitments. If you notice issues with orders, try to work with them to fix those issues in a way that is beneficial for both you and them. If this doesn’t work, you may be able to terminate the contract. This will allow you to start over with a new supplier.
Also, make sure to monitor cost efficiency over time. A deal that you negotiated a year ago may not be the best deal now. Be honest about what you need, and the supplier is more likely to be willing to work with you.
Conclusion
It’s important to keep in mind that your supplier can make or break your business, so make sure you choose the best one. There are ways that you can increase your chance of finding a good one: define your needs upfront, ask questions, and be open when evaluating bids. Of course, make sure that you do your due diligence to make sure the vendor you choose is legit. Once you’ve worked with them a while, evaluate your relationship to make sure it’s still working.