How do you judge good suppliers versus bad ones? What are the things I need to look out for when picking my supplier?
Finding a good supplier for your business is essential. If you have a great relationship with your supplier, you can potentially secure better payment terms, giving you much-needed flexibility in your business.
On the other hand, an unreliable supplier may leave your shelves empty and your customers going to your competitor’s store. So how do you judge a good supplier?
Here are three steps to finding and keeping a great supplier:
1. Finding the right supplier
Although there are thousands of suppliers, choosing one appropriate for your business will be much easier once you know exactly what product(s) you want to buy and which type of supplier you need to buy from. Once that decision has been made the next step is to comb through the different resources to find one.
Trade shows: One of the best places to find quality suppliers is at a trade show. You’ll have the opportunity to see which suppliers take their market seriously, glean great information from the one-on-one conversation with the sales representative, gain insight into the company, and be able to instantly compare a variety of competitors.
Trade publications: Magazines specific to your industry or market are another great source of potential suppliers. Although you can’t judge a company by its ad, you can learn a lot from their marketing message and can gain some insights on certain companies in the publication’s articles.
Peers: Other people in the trade may be willing to steer you towards great suppliers. You can start by attending trade shows or contacting other non-competing businesses similar to yours. Online forums are another place to swap stories, ideas, and experiences.
Search online: Most quality wholesale suppliers will have a good website and make it easy to find. When evaluating potential suppliers, make sure you do your homework! Ask for references, get opinions from your peers, search for reviews online and contact relevant associations.
2. Negotiate great terms
Once you’ve picked your supplier, make sure you understand the terms of the agreement (and don’t be afraid to negotiate better terms). Quality wholesale suppliers want great relationships, so if the one you’re dealing with doesn’t have time for your questions or concerns, you may need to keep shopping around.
What are the shipment terms? Do you have to pay for shipping or do they? What are the payment terms? How much credit are they willing to extend? How quickly can they ship the product? Do they offer expedited shipping if you sell out of your products?
Go through a few what-if scenarios and see what terms are applicable in that situation. You don’t want to wait until an emergency happens to find out.
3. Build Long Term Business Relationships
Developing a good rapport with your supplier is a key ingredient to securing a quality wholesale product supplier. The better history you have with them and the more loyal they see that you are, the more leverage you will have!
You may be able to secure more favourable terms, negotiate flexible payment schedules, have input in future product development, or receive preferential treatment.