Evaluate your suppliers

For a small business, the value of researching and investigating customers before extending credit is well known, but small businesses often don't do the same for their suppliers. In reality it is just as important - the action of a shoddy supplier has a flow-on-effect to your customers. A late delivery or the delivery of inferior goods may mean you cannot meet your own obligations, letting down your clients and damaging your credibility.

Sourcing a new supplier can be a daunting task, where do you start and how can you find out if the business will let you down? The truth is, you can't guarantee it, but there are a number of things to consider when engaging a new supplier:


Providing quality products and services is extremely important to keep your business profitable. You wouldn't go back to a restaurant that gave you food poisoning so why would you settle for a supplier that sells you an inferior product? As a small business, you deserve quality products and services and should shop around for a supplier that will offer you as such. It is not just about ensuring quality for yourself but also for your own customers and clients - if you receive inferior products, it will affect the service you provide your customer. Find out where the supplier sources their products and do your research on the quality of the goods - make sure you are 100 percent happy with the quality provided.

Also determine what services you consider invaluable in a supplier - product warranties, fast delivery or expertise? In some cases, it may cost you a little more for quality products and services but you should consider what you could lose by going for the lesser option.


While price is obviously an important aspect when it comes to selecting a supplier, you should also consider other factors. It may be worthwhile paying a little bit extra for payment terms, flexibility and quality. Will the supplier be flexible with the form of payment or offer credit terms? If not, you need to ask yourself if it is worth it. There is little point trying to save money if the terms of payment do not suit your business practice or the supplier is unreliable in delivery as it will only cause more work in the long run.

If you intend to place large orders or purchase regularly, ask if the supplier can offer you a discount. This will save you money and guarantee regular income for the supplier. In all cases, keep in mind the product or service which you are acquiring, price may not always be the determining factor.


Reliability is also an important factor when considering a new supplier. If you are relying on a delivery and the supplier fails to deliver the correct order or on time, it can seriously impact your business. Therefore, before you commit to a new supplier, it is worthwhile asking the business for references from existing customers or for their on-time delivery statistics. One will most likely suffice but to get a well-rounded view of the company, it would be best to obtain both. Start with a small order from the supplier which will also allow you to experience their service first hand and determine if they meet your needs.

You don't want to be caught short if your supplier closes its doors. Imagine placing a large order only to find out the business has closed and you have to not only source a new supplier but also find someone to fulfil your order - and fast. Cover yourself and investigate the supplier by ordering a credit report. It will provide you with a good idea of the financial viability of the business.

Conduct a credit check on a potential supplier now >>

As good business practice, a small business shouldn't rely on a single supplier. If that supplier is experiencing problems, it is not good news for you so order from two or more suppliers and know you can rely on one if you can't rely on the other. It may also be beneficial to keep a list of suppliers on hand - this will provide you with an instant list of back-up suppliers if you need it.


Perhaps one of the most important factors to consider is whether the supplier has the capacity and capability to supply you as you require. Make sure you enquire as to the supplier's capability before you place any order, although be particularly certain before making a large purchase. Making an assumption about the supplier's capabilities could end in disaster for you if the business can not deliver the goods. Some suppliers may accept the order in the vain hope they can somehow deliver as expected but often than not, they'll fall short. This is particularly prevalent with smaller suppliers who may not have the inventory you need. Depending on the size of the orders you intend to make, it may be worthwhile engaging a larger supplier, however you take the risk the service may not be as personal with a larger business.

The support of a valued supplier could see your business go from strength to strength but a supplier with bad habits could see you lose face in front of your own customers. Do your research to find a reliable, quality supplier which will enhance your own business.

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