A supplier is an important element of every business. A supplier could be a supplier of goods or services that the company in turn resells or adds value. The quality of the suppliers that a company has directly impacts or affects the quality of service provision. It is important to select your provider for the right reasons. While you may have unique vendors from time to time, it is riskier as there is no defined service level guarantee and no long-term commitment. These providers should be avoided as much as possible. In some companies, the procurement is only made from a list of vetted registered suppliers who would have met strict criteria and scrutiny. It is easy to find any type of provider. When you put considerations and conditions, you can easily sift and select those providers that meet the standards and status of your organization. There is a provider for every size and class of business. Not all vendors out there are genuine partners to trust and build your business. Here are some considerations and tips to help you get the best vendors to partner with your business.
1. Provider capacity and reliability – How is the organization you are considering as a supplier able to meet your needs? How long have they been in operation? What is their production capacity and the level of pressure they are already under from their existing customers? Consider the reliability and track record the business may have. You may need to speak to other clients who have already started using this particular provider’s services to get a second or third opinion. Without traceable references, you have to assume that the provider is trustworthy. Also consider the stock levels the supplier is holding at any given time. This will tell you if your order will be filled instantly the next time you place an order. Some vendors don’t even hold stock, they only order from their own vendors once they receive an order, in which case delays are experienced that could affect the way you serve your own customers. It is important to note that the reliability or lack thereof by your suppliers has a direct impact on the reliability of the business. You cannot fully support your customers with unreliable providers that you are not sure you will find in the same place the next time you visit. Take the time to eliminate those who constantly disappoint you.
2. System of corporate values – A company’s value system tells you what they believe in and their overall work ethic. Always study value systems and choose vendors who appear to live up to their value in real life. Values become the habits and character definition of the people who serve you. However, some providers just hang stock on the wall and that’s where it all ends. A company would rather have 3 values that it defends and lives by than have ten flowery values that remain imaginary, not real. Do the values in any way tell you something about service delivery, customer focus, etc.? Find a provider that matches your values and beliefs. A supplier who doesn’t skimp a bit to make a sale. A supplier who would rather lose the order than supply knockoffs that they claim to supply originals.
3. Product quality – Most organizations thrive because they offer quality products. You may have very jovial salespeople with a positive attitude smiling all the time, but if the range of products you are dealing with leaves a lot to be desired in terms of quality, then your service totally spoils the growth of the business. No one will want to resell products that have not been tested. One thing most clients avoid is having to deal with comebacks or comebacks, as this affects profitability and reputation. I have noticed that whenever I have provided a good and services to a client and there are some concerns and returns, I have had to work overtime to retain that client than in cases where I have provided a high quality product or service. In such cases, clients have spoken highly of my business and, in turn, have become my silent salespeople.
4. Credit conditions – The payment options provided by providers help them retain and serve their customers satisfactorily. Most customers are not interested in partying with cash the same day they receive the goods or services. Clients need time to process the payment and to be able to strengthen their cash flows through these legal payment delays. Although credit conditions are attractive, some clients tend to abuse these facilities by over-extending their credit payments. If you are selecting a provider, always agree on a reasonable line of credit, such as 7 to 14 days, that is neither too short nor too long. It offers a win-win scenario. Note that you may also have clients who require the same line of credit. In cases where suppliers refuse to give you such terms, then you should also adjust your cash flow position by making sure your customers pay as you deliver the goods. I have seen companies collapse from the weight of having to finance other companies, all because they simply wanted orders and debtors. You’d rather not have the order if you don’t get the terms and your customers are pushing for them. You can only give away what has been given to you.
5. Proximity and distance – This is an important consideration. You could have suppliers on other continents outside of yours. Please note that there is a delay in shipping that occurs between the time you place an order and the time it is delivered to your own warehouse. You may need to stay in touch with vendors that are also closing in case you run out of stock and receive rush orders. By properly managing your imports, you will be able to source all your material from other continents. In that scenario, distance is no longer a problem. However, the advantage of dealing with smaller local suppliers is that you have a backup plan and in case of returns, it is an easier process to return the product to the supplier without large transport costs.
6. Competitive prices – Companies want to be profitable. After all, the reason companies exist is to make a solid and consistent profit for the benefit of the investor and all stakeholders. One way to increase profits is to make sure you don’t unnecessarily buy your supplies from expensive suppliers. Having registered suppliers and also a consistent relationship with existing suppliers allows the customer to take advantage of prices. They can negotiate discounts for bulk purchases. In most companies, even after selecting a group of vendors to deal with both locally and abroad, there is a policy for procurement personnel to obtain 3 quotes for the same product from different vendors. The $ 5 price difference does make a difference in the price of the same product. The goal is to ensure that they get the best possible price to convey the same benefit to the end user.
7. Warranty issues – It’s one thing to supply a product and it’s a totally different ball game to make sure you have a valid warranty. When purchasing the product, make it clear that you want a warranty card or certificate. You can only grant a guarantee to your customers based on the guarantee given to you by the supplier. This is where paying attention to detail is of the utmost importance. You should be able to return the product if it does not deliver what the manufacturer claims is the proper shelf life and performance capabilities. The guarantee should not be assumed but be in writing. If you have bought on the local channel, it is easier to process your guarantee than in situations where you go to alternative channels or markets. I once had a rude awakening when I established a supplier in the United States of America while running a business in Zimbabwe. The huge machine took 2 weeks to reach my office. The machine was delivered to the customer immediately. After two weeks, the huge machine failed and I had to go back to my office. Because I had not purchased the machine through established channels, I had to ship it back to the United States. The shipping cost was only equal to the profit he had received a few weeks earlier. Not worth it; instead, focus on a channel that respects the international warranty.
8. After-sales support – Depending on the nature of the product you intend to purchase from a supplier, you must establish what happens in the event that they have sold you the items and now you need technical support and assistance. Always assess the ability to support you after the sale has been made. In addition, you also need to develop or hire skills to make sure they offer the first level of support and maintenance for the equipment you are selling.
9. Updated product range – How up-to-date is the range of products that your supplier is giving you? New products are always being developed on a daily basis, if your supplier sticks to the old range, soon your company will be left behind. Advances in technology have ensured that new, better, faster, more efficient, and more profitable product launches come to market. The objective is to make more modern products available to the market at competitive prices. This is made possible by companies investing in research to ensure they make the same, if not better, products at a lower cost every time. Sometimes it is good to partner with a supplier who has a wider range of options than where a range is marketed. The broader the range, the more options you have at your disposal to choose from.
10. Shorter delivery times: system efficiency – When choosing suppliers, you should consider how much longer you should normally wait for your order to be received or for your inquiries to be answered. Some companies grow to levels where they can no longer make individual promises to customers and keep them. You are not sure if when placing an order you will receive it instantly, after 3 days or 3 weeks. Your own customers often dictate the delivery times they need from you. In the event you experience delays in your service, try to communicate with the customer as much as possible to ensure that delivery time issues do not affect their loyalty to your services. Partner with vendors that have efficient systems. I usually get angry when I have to wait 20 minutes while the red tape is set up in a company. All I want in most cases is to pay, get a product with my receipt or invoice. If the supplier’s internal processes are the ones