Find Out How To Choose The Right Suppliers And Vendors For Your Business
By Blog Admin •
September 23, 2022
Posted in Business
The right suppliers and vendors for your business can help your business make more money.
If you run a business – whether a small sole-proprietor affair, a big corporation with many employees or something in the middle – you have to buy stuff, sometimes lots of stuff. You have to have operating supplies, building/manufacturing materials, promotional items, and inventory at the least.
Even someone with absurdly low business overhead like, say, a freelance writer still has to have, at a minimum, an Internet provider, website hosting service, computer and printer, and paper and printer ink, as well as someone to supply those services and materials.
So you rely on chosen suppliers and vendors for your business needs. But if you don’t choose wisely, you don’t make money the way you should. You spend way too much time (which is indeed money for business owners), putting out customer/client fires, chasing down orders, and scrambling to have what you need to do business.
Let’s see, then, how to choose the right suppliers and vendors for your business to make more money the easy way by ensuring that the end of your business runs Teflon smooth.
FINDING THE RIGHT SUPPLIERS AND VENDORS FOR YOUR BUSINESS: QUALITIES YOUR BUSINESS PARTNER SUPPLIERS MUST HAVE
Make no mistake about this: a supplier or vendor is a business partner, not just some distant person or business that provides some stuff you need. And you know that your business partners absolutely must possess certain qualities and attributes, such as:
WILLINGNESS TO ALIGN
The suppliers and vendors for your business may not really have the same goals as you (except to make money and realize a profit), but they must be willing to work as if they do.
“In order to be clear about how you’ll work together, it’s important to choose a collaborative partner.” And that may even mean “a partner that visits often to learn about you, what’s important to you and how you run your business” (Entrepreneur).
Some suppliers and vendors for your business will be around only for a short while because you need them only to meet specific short-term needs. The rest, though, should be in it for the long haul, should be ready for a long-term commitment.
For the longer you know someone, the better you know them, and the better you can work together. A business partnership, like any other relationship, thrives only when there is a solid commitment on both sides.
HONESTY AND INTEGRITY
First and foremost, your suppliers and vendors for your business need honesty and integrity.
Alignment and commitment can really flourish only in an environment of honesty and integrity.
“Be careful of potential partners that over-promise. No one can give you everything under the sun. Make sure you feel like you’re being told exactly what they can – and can’t – provide and that they’re adequately and truthfully representing their skills.
“Companies that are honest about their capabilities and potential shortcomings are ultimately a better fit than those that promise you the moon but cannot deliver” (Entrepreneur).
The suppliers and vendors for your business also have to know exactly what they are doing on their end.
Your partners should be able to bring plenty of experience, broad and deep knowledge, and demonstrated skills to the table. They must be people and businesses you believe in and can trust to deliver. And this means you will need clearly defined selection criteria and a thought-out selection process.
SUPPLIERS AND VENDORS FOR YOUR BUSINESS: SELECTION CRITERIA AND PROCESS
Why do you need to think about your selection criteria and have a solid process in place?
Because choosing the right suppliers is a critical component in your business – one that ensures you can deliver your products/services on time, at the right price, and in line with your quality standards . . . and ultimately make more money.
SELECTION CRITERIA FOR SUPPLIERS
An exhaustive list compiled well ahead of time is the way to proceed here. This list that will allow you carefully evaluate potential suppliers should include (at a minimum):
The first step here is to identify the methods you’ll use to find potentially suitable suppliers. That could mean, for example, advertising in trade publications and/or approaching likely companies directly.
“Allocate a time frame for conducting your supplier’s selection process. Appoint qualified members of your team to review the proposals and recommend a shortlist of suppliers to choose from” (business.org).
PUTTING OUT CALL FOR BIDS
After compiling a shortlist of suppliers, the next step is to put out a call for bids, possibly a Request for Proposal (RFP) or a Request for Quotation (RFQ) under formal conditions. However you go about it, just make sure you include all the pertinent details about products/services needed, as well as probable quantities, delivery dates, expected fulfillment and turnaround times, and quality standards.
You will also want bidders to respond with respect to all these details, as well as providing some information about their sources of raw materials and their providers.
EVALUATING BID SUBMISSIONS FROM SUPPLIERS
Once bid submissions start coming in, you will need to carefully evaluate each and every one of them, checking them against the list of selection criteria you compiled at the outset.
Determine the importance of each criterion and “score all submissions against this for an objective method of evaluation. Identify what the agreement or contract period with each potential supplier comprises to ensure you aren’t drawn into a situation that could be damaging to your business” (business.org).
And remember, the selection process isn’t over once the initial selections have been made. You will still have to monitor supplier performance to make sure they can and will do what they promised and that the products/services continue to meet your needs.
Keep in mind as well that mistakes and slip-ups happen, so what you want to monitor are trends and patterns, not one-time occurrences.
SUPPLIERS AND VENDORS FOR YOUR BUSINESS: SPECIFIC SELECTION TASKS
That’s the broader overview of the requisite supplier/vendor qualities and attributes and of the selection process. Selecting supplies and vendors for your business takes careful planning. So now, here are some specific tasks and best practices for selecting the right suppliers:
When selecting the right suppliers and vendors for your business, nothing beats word-of-mouth recommendations from people who have first-hand experience. So find out about demonstrated capabilities and proven track records through third-party referrals. Find out if a prospective supplier has worked with other companies in your industry and contact them.
And don’t forget to check out reputations at the standard third-party review sites.
Interviews are important when selecting the right suppliers and vendors for your business.
Also, take the time to interview and get acquainted with several members of a supplier’s team.
“Often, there may initially be one point of contact when you’re negotiating a potential partnership, but you may want to ask who else on their team will be involved in executing the game plan you’ve put together” (Forbes). And when it’s feasible, take the time to visit the supplier’s office or headquarters, either in person or virtually.
READ THE AGREEMENT CAREFULLY
The devil’s in the details, and relationship’s often in the fine print. Reading the fine print is essential when selecting suppliers and vendors for your business.
So you absolutely must ready through the supplier/vendor agreement carefully and thoroughly. If you find anything that doesn’t align with your business model, renegotiate terms immediately. The elements to pay particular attention to are:
Costs (of course)
Parameters of working relationships
Expected and promised results
Terms for ending the relationship (if necessary)
CUSTOMER SERVICE TRUMPS ALL
Really, though, if suppliers and vendors for your business can provide the products or services you need in the right quantity and quality and on time, then everything else takes a back seat to customer service.
Superior customer service – that willingness to quietly go the extra mile simply as a matter of course – trumps pretty much everything else.
Here, then are a couple of illustrative examples:
BANDANA CLAUS’S BANDANA SOURCE
Cancer patients undergoing chemotherapy treatments usually lose their hair.
The chemotherapy drugs specifically target and suppress rapidly dividing cells like cancer cells. But the problem is that these drugs also attack other cells that divide rapidly, such as hair follicle cells, because the drugs indiscriminately affect both normal cells and cancer cells.
As a result, many people receiving chemo lose most or all of the hair on their heads (a condition known as alopecia). And for young people, that can be both disturbing and traumatic.
To cope with this condition, many patients resort to wearing a hat or head covering of some sort. The younger patients often prefer something like a bandana for their head covering. And Bandana Claus, Bruce Kujaski, accommodates them giving out bandanas at Christmas, as part of the Daniel Project, in Costa Rica.
When asked where he purchases the bandanas, Bruce didn’t hesitate to say, “Wholesale For Everyone, of course.” And he was quick to add that he is particularly pleased with Wholesale For Everyone’s fast delivery and now gets all his bandanas there. It took Bruce a while, though, before he hooked up with this bandana supplier.
In the beginning, Bruce’s sisters helped him by purchasing bandanas from various local stores. But the sizes varied too much, and the colors were too drab.
So Bruce started looking around online for a supplier from whom he could buy bandanas in volume and in loud colors and eye-catching patterns that would appeal to the teenagers. At length, he stumbled on Wholesale For Everyone and was impressed with the “extraordinary variety and the discount offered on large quantities.”
Now, Bruce gets all his bandanas from Wholesale For Everyone. One of the main reasons is that they carry the loud colors and designs that really appeal to the young cancer patients, such as the tie-dyes and the star patterns.
The other reason is the superior service.
For example, a recent order was shorted because the manufacturer didn’t have enough product to fill the order. So Dan Weaver, owner of Wholesale For Everyone, called around to his competitors to find what Bruce needed. The competitors didn’t have them either, so Dan made up the difference with some of his religious bandanas, which were a huge hit.
SEAN GAUTREAUX AND THE MARDI GRAS PENALTY FLAGS
Shortly after that infamous January 20 NFC Championship Game, when the yellow flag did not fly for pass interference, and the Saints lost the game to the Rams as well as a bid for the Super Bowl, Mardi Gras float designer Sean Gautreaux had an idea.
He came up with the perfect way to laugh in the face of that football tragedy, to give it an ironic twist and wring out a little humor. And that was a Mardi Gras throw that would mimic the penalty flag never thrown in the game.
So Sean went to work.
After finding local fabric stores an unreliable source for the needed materials, Sean did like all of us and went online. He conducted a Google search for “yellow cotton squares.”
At the top of the search results was Wholesale For Everyone, as well as a likely looking competitor on the first page. After doing a quick comparison, Sean found that Wholesale For Everyone (WFE) was more professional and had the competitive prices he needed, and so the competitor was ruled out.
Here’s the process Sean used to select Wholesale For Everyone as his supplier for the raw materials for Mardi Gras penalty flag throws.
“The competition’s site was either antiquated or non-professional or both. WFE had at the top of their page the 1-800 number and seemed welcome to phone calls. The competitor’s site mentioned that ordering calls were not welcome, and the number was only for customer service after the order was placed. So, if I ordered from the competitor, would the shipment get lost in the mail or be late? I needed these flags made fast.”
And there’s more: “I called up WFE and spoke to Jeff. Boom, order placed, and I had the flag material in days. They even waved the shipping cost. I placed another order. Boom, I had that order in a few days as well.
“Yesterday morning, I placed an order for 640 pieces. An hour later, I called back to revise the order and add 60 pieces to it. No problem. The pieces were out the door yesterday, in the mail at a very reasonable standard shipping cost, and will be at my door tomorrow, 2 days later.”
Speed and accuracy were paramount. “Mardi Gras is March 5th, and the riders need to get their flags in time to decorate them with time to spare.