Whether you’re a wholesaler, a local store, or a direct-to-consumer business, finding suppliers you trust can be one of the trickiest parts of running your business. Your relationship with suppliers can make a huge impact on your business operationally and financially. That’s why finding suppliers you trust is critical.
This article will cover the definition of suppliers, how to find suppliers, and best practices when working with suppliers to help your company keep up with customer demand. We’ll also review what factors should be considered when selecting a supplier, from price to reliability to location. And finally, we’ll touch on how inventory management software can help your business stay on top of orders placed with those carefully-selected suppliers.
What are suppliers?
A supplier is a business that provides goods to another business or service. In this sense, a supplier is the initial link in a sometimes complex supply chain. That’s because without primary or wholesale suppliers, most companies could not provide their customers with the goods and services they demand.
A supplier might sell auto parts, or laptops, or raw materials used to manufacture neon signs. And a supplier might be a manufacturer, or a wholesaler, or perhaps a drop shipper. But regardless of what these suppliers sell and how they procure it, one thing’s for sure: your company relies on these vendors to keep your business up and running.
If your business does not manufacture finished goods, your business requires well-priced, reliable suppliers to handle customer demand. And that means that choosing the right suppliers couldn’t be more critical.
How do I find suppliers?
Maybe you’ve found yourself asking: “How do I find wholesale suppliers”? It’s a good question—and one that requires a bit of homework, especially if the location of suppliers will impact your business.
So how do you find suppliers for your business? You can start by doing a quick Google search. But many businesses also find suppliers through trade shows, trade publications, or simply chatting with others in the same industry. Of course, your competitors may not be forthcoming with their list of suppliers. But word-of-mouth is still a great way to identify potential suppliers in your industry.
Once you’ve put together a list of suppliers, you can reach out to them via email, phone, or sometimes even make an appointment to chat in person. To make the vetting process even easier, try to prepare a list of interview questions. Here are some suggestions of what to ask potential suppliers:
Questions to ask potential suppliers
- Tell me about your company.
- What kind of products do you sell?
- Do you buy products from someone else or manufacture them yourself?
- If you buy from another business, can you explain how your supply chain and lead times work?
- How has your company been affected by the supply chain crisis?
- Will the products I need be in stock or drop-shipped to me?
- Do you have a minimum order quantity (MOQ) or any other minimums I need to know about?
- When do you accept orders?
- What is your lead time for an order?
- When is your cut-off for orders?
- How does your delivery work? Are there any fees?
- Can I see a price list?
- Do you offer any volume discounts?
- Has your business made any efforts to increase sustainability and reduce its carbon footprint?
- What is your refund policy? What happens if I’m not satisfied with a delivery?
- Tell me about how you handle customer service.
- Who will be my person of contact once I’m an active account?
- How will we communicate?
Asking tough questions to potential suppliers—and really understanding what a working relationship might look like once you’re onboarded—can help you select better suppliers from the start.
What factors should be considered when selecting a supplier?
There are many factors to consider when searching for new inventory suppliers—and we touched on several of them in our suggested interview questions. But if we could only zero in on just a few factors, we’d focus on price, reliability, and location.
You’re running a business—and chances are your goal is to satisfy your customers while remaining as profitable as possible. And even if you’re a non-profit organization, you’re certainly looking to keep your books lean.
That’s why selecting suppliers whose price points match your budget is so essential. Pay too much for inventory, and you’ll either have to pass those costs onto your customers or watch your profit margins dwindle.
Ask all your potential suppliers for price lists, and compare products and prices between vendors.
But do keep in mind that there’s more to a price list than a case price. Vendor minimums can force you to purchase inventory you don’t need, increasing your overhead costs and creating inventory management headaches. The same goes for delivery fees and administrative fees.
Sometimes, it can be more cost-effective to choose a slightly more expensive supplier that’s willing to split a case, deliver at a moment’s notice, or waive expensive account management charges.
The only way to truly know what suppliers are the most affordable is to figure it out on paper. Determine what your business needs to order, and estimate how much that will cost you with each supplier you’re considering.
Where your supplier is located could be just as essential as how much they charge and how reliable they are. Why? Disruptions to the global supply chain are making local partners more appealing than ever.
A local supplier likely relies on a vehicle to get inventory from their warehouse to your business. And a supplier across the country may use a train or truck, or plane. And a vendor across the globe likely uses a boat.
Talk to your potential suppliers about where they’re located. Clarify where the warehouses you’ll order from are positioned, too–not just where the administrative offices are. And, once again, confirm what items are drop shipped. A drop shipped item is never warehoused by the supplier and is sent directly to you.
A cost-effective supplier is great, but if they can’t deliver what you need when you need it, those “savings” aren’t going to help your business whatsoever. To truly select a supplier, you’ll also need to consider their reliability.
When vetting a vendor, talk to them about how and when they accept orders, how long it takes them to turn an order around, and how they’ve been affected by the global supply chain crisis.
Another question you might want to ask? Whether a supplier will assist you should a product you need become unavailable. Will they help you search for an alternative, or will that become your own problem to solve?
You can also ask potential suppliers for referrals from customers. Talk to their customers about anything and everything—but especially reliability.
Once you’ve selected your regular suppliers, there’s still more work to be done. These three best practices can help your business run smoothly and keep your company agile should your suppliers experience disruptions.
Have backup suppliers ready
After you’ve vetted and selected your regular suppliers, you might want to set up accounts with several backup suppliers that carry the products you need. This is a good idea regardless of the global economy, but especially wise during tumultuous times.
If possible, keep accounts with these backup vendors active. That way, you can place an order the minute you learn your regular supplier cannot deliver a specific item.
Evaluate your supply chain regularly
Even if your business is running smoothly, it never hurts to take a step back and evaluate your company’s network of suppliers, transportation providers, shipping partners, and more.
Take some time every quarter (or even every fiscal year) to identify vulnerabilities in your supply chain, then remedy them. For example, this could be replacing suppliers who failed to deliver on time, sent damaged goods more than once, or failed to meet delivery deadlines on several occasions.
If you need help evaluating your network of partners, there are logistics consultants who can assist you with this process.
Use inventory management software to stay on top of orders
Finally, businesses can ensure operations run smoothly by staying on top of their orders. After all, it’s the business, not the supplier, that’s responsible for placing a complete, informed order.
The right inventory app can help businesses of every shape and size get organized, better understand their inventory, and receive customized alerts whenever they’re starting to run low on a given item. This technology helps companies place accurate orders that are complete, economical, sensible, and way less stressful.
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