There is a lot of hard work and planning that goes into launching a business. As a business owner, you are constantly looking for opportunities to manage current operations smoothly and expand your business while remaining competitive.
As a business begins to take shape, owners need to make all sorts of important decisions such as where to source products or materials from while achieving the best value for their money.
This article will help you choose the right supplier from the endless list of potential suppliers on the market.
Below, you'll learn about key factors to keep in mind when shopping around for the right supplier to fulfil your business needs.
It is important to take the time and effort to develop comprehensive criteria that meet your business needs before you even begin searching for suppliers to source your goods and services.
The best way to map out supplier criteria is to narrow down a list of goods and services that you need in the short and long term, including any raw materials, products, or services that go into producing your final product.
These may include the following:
For instance, suppose you own a company that manufactures t-shirts. In this case, you will need to source fabrics, dyes and colourants, and embroidery machinery among other raw materials.
Once you have a better idea of specific products and materials you might need for your production process, you can narrow down a list of vendors who fit your criteria.
Attention needs to be paid to additional elements as well when it comes to choosing a supplier.
When it comes to deciding whether or not your business should import its goods and materials from abroad, the right answer isn't always clear.
The only correct answer is one that best caters to the needs of your business and upholds brand image.
Sourcing materials locally goes hand-in-hand with modern brand values, especially in this age, brands are increasingly trying to connect with eco-conscious customers who want to buy and consume locally.
There are, however, a number of benefits of importing your products or materials from other countries.
For instance, businesses that import from massive manufacturing hubs such as China almost always benefit from lower prices and greater availability of materials.
As a result, importing from these markets is often more cost-effective and reliable for drop shipping businesses looking for a dependable supplier rather than sourcing materials locally.
However, these lower prices and increased reliability come with risks. For instance, cheaper products and materials bought from overseas markets are often received in poor conditions due to their lengthy shipment times. The overall condition of sourced items is generally compromised compared to items you would find in local markets.
Still, contracting with a local supplier is often preferred by smaller businesses because it affords them a chance to cultivate a network with major suppliers in the region and establish a brand name in the community while providing products or services to their local customers.
Shipping locally is also less time consuming than importing from international markets.
The quality of raw materials acquired to keep your production process running will significantly impact your bottom line regardless of your industry.
For example, low material quality will reflect poorly on the end product and ultimately negatively impact consumer satisfaction and brand reputation.
Moreover, the materials you acquire may be subject to certain laws especially if you're sourcing chemicals or other types of hazardous materials for manufacturing purposes.
Therefore, prior to signing any contracts with a new supplier, thoroughly evaluate the quality of the materials they supply.
Make sure the supplier you choose has both the capabilities and a proven track record of supplying businesses with the quality of materials you need and that your customers expect
Alongside placing heavy considerations on the quality of sourced materials, choosing a supplier also entails having clarity on the prices of short and long-term supply deals.
Keep in mind that just because a supplier is charging a higher price for certain materials, that does not automatically translate into improved quality of the given materials.
It is critical for business owners to be fully aware of the distribution of supplier charges including overall prices, taxes, and any other administrative fees that may be relevant to working together.
Business owners realize that there isn't any shortage of vendors in the market. That being said, in a majority of cases, only a handful of vendors will meet each sourcing criterion and eventually prove to become a reliable supplier for the business.
Suppliers' reliability is affected by aspects such as whether they have a dedicated customer service channel or can meet the demands of your business both now and in the foreseeable future.
Therefore, it is crucial to search for suppliers with proven track records of satisfied, longer-term clients rather than suppliers with a high volume of short-term clients.
A match of organizational culture and values alongside ease of communication should be looked upon closely when choosing a supplier from a list of potential vendors.
In this consumer-centric age, individuals are seeking out brands that share their values, beliefs, and ethics.
In other words, successful brands need to be aware of the values and beliefs of their target audience. They need to closely match those values if they wish to remain relevant to their customers.
Thus, as a business owner, it is imperative that you build supplier relationships with companies that share similar values, culture, and moral integrity.
In turn, better supplier relationships result in higher satisfaction for your customers and sustained profitability for your business.
Are you looking for new and innovative ways to make your business procurement process simpler and more efficient?
Proqura is currently one of the best, leading procurement software providers on the market. Signup today for a demo of Proqura. Read our Procure-To-Pay Blog or Contact Us today to learn more.
