By: First Union
How to More Effectively Find and Work with Suppliers
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The suppliers with whom you work are obviously integral to your business. They provide the raw materials, or in some cases the items that you resell. Without these things, well, you'd have no business of which to speak. Not to mention, beyond simply supplying you with the products/materials required to run your operations, suppliers can also be an indispensable pipeline as far as getting you critical information to include news on competitor progress, new product potential and new opportunities that might exist.
So how do you go about finding a suitable supplier and then proceeding to work with them in the most productive and efficient way possible…
What is a "Good Supplier"?
Yes, many smaller businesses are going to be apt to focus on price. This, of course, is a consideration as the budget is always important. However, keep in mind, there's more to choosing a good supplier than simply going with the lowest bidder. By the same token, the supplier is also out to make money. So if you are consistently haggling with them, they are probably going to stop showing up for you.
One thing you definitely want to look for in a supplier is reliability. Perhaps more so than price, this factor is critical. Are their shipments accurate? Are they arriving when promised? What condition is the shipment in? In some instances, though not all, larger supplies often deliver more reliable results. This is because they tend to have departments specifically looking after deliveries and consequent schedules. That said, oftentimes with smaller suppliers, you receive more personalized attention as their client base is not as extensive, and thus they can afford to do this. Another thing you might do, if you are prone to working with smaller companies, is to utilize more than one small supplier and thus divide orders up.
Also, look at the supplier's overall stability; meaning, what's their track record, how long have they been in business and do they have a solid reputation among their clientele. Usually, when signing on with a supplier, you are looking for a long term relationship—understanding something about the company's stability will no doubt help you to foresee whether or not this is the type of partner with whom you want to work.
In general, you want to measure whether or not you think that the supplier is competent at what they do and the services/products they provide. This is going to include a combination of the above qualities, plus things such as the professionalism of their staff, their knowledge of the latest trends, the type of flexibility they're willing to offer, as well as their level of customer service—among other such factors.
The question of whether or not you should go ahead and change suppliers is one with which most business owners struggle at some point or another. If you are looking for a better deal, this may not be a question of changing suppliers outright, but rather of negotiating. Then again if they're not willing to renegotiate, then maybe a change is in order.
- Improving service. One thing beyond price renegotiation that you might want to revisit is the level of service you're getting. You don't often know what is going on with every single facet of your business—this may be the case with your supplier as well. Maybe they're unaware of a shipment mishap or a customer service breakdown. Reach out to them; express your concern and try and brainstorm a solution. Odds are, they want to maintain a strong working relationship with your company. And eventually, someone in the chain of command will step up and address the issue. If they don't, then probably time for a new supplier.
- A better relationship. Depending on the level of engagement you have with your supply company, you may want to work on tightening that partnership. Some suppliers will strive to form bonds with their clients, while others keep it strictly a more distant business relationship. You need to address your wants and expectations and then see if they respond in kind.
Some additional signs that it's probably time to switch it up:
- Unreliability. Again, reliability is so key to the success of your business. If shipments are late or damaged, you can't deliver and if you can't deliver, you're letting down your own customers. Definitely bad for business. Yes, companies do hit bumps in the road on occasion, so try and address it first. However, if this is habitual you know you need to find a new source.
- Lack of cost competitiveness. You will likely be approached by your supplier's competitors—this happens all the time. It is certainly okay to hear what they have to offer. Consequently, if they're pricing is far below and their product is on par with that of your current supplier then you need to either reconsider your position or take the offer to your supplier. There's nothing wrong with trying to get the best deal in light of an actual offer put on the table by another company.
At First Union Lending, we understand the ins and outs of working with various vendors and suppliers. If you do need additional capital to purchase more products or buy in bulk and thus get a more substantial discount, we can certainly help. Our business loan programs are flexible and always fast! Call today!