Time to evaluate your suppliers

As a small business owner you have probably spent time researching your customers. In supporting a marketing campaign you will need to decide on thetarget audience and further decide if that audience will be worthy credit customers.

Good research is in the nature of the role for SME owners, but many business owners don't take the same duty of care when picking and evaluating their suppliers.

Your suppliers are just as important to the operation of your business as any of your customers so it's important you don't rush into the cheapest option available. So how do you find a good supplier and what should you look for? The truth is that even after research there are no guarantees, but there are some key areas to consider when sourcing a new supplier.

Look for quality

There's no point having a great sales team if they are selling an inferior product. Ultimately your product will only be good as the quality of service provided from your suppliers. One way to identify their quality is by sourcing their current products and researching their goods or services.

This will allow you to identify if their products are good enough and ensure you are 100 percent happy with what they offer before making any commitments.

Identify value for money

Generally speaking price can be a strong indication on the kind of quality you are likely to receive.Due to the size and budgets of small businesses, many SME owners will make the mistake of committing to the cheapest option available to them.

However, price extends beyond the quality of the product and sometimes paying extra can result in other benefits such as longer or more flexible payment terms.

Are they reliable?

Asking for references from existing customers can be a great way to identify the reliability of a supplier as is ordering a credit report to ensure their financial stability. If this seems overwhelming there are companies like Dun and Bradstreet that can help source detailed information for you.

It's also beneficial not to over commit early on. Start with small orders to get a feel for your supplier and their delivery methods. After time and when you can guarantee their reliability you can then make subsequent increases to your order. However, it's good business practice not to rely on a single supplier as the consequences can be damaging in the event that your only supplier goes out of business.

Ensure they have the capacity to supply

Possibly the most important factor to consider when choosing a supplier is will they have the capacity to meet your demand. It's essential that you make sure of the supplier's capability before you place an order as some suppliers will make the mistake of accepting an order in vain and then fail to deliver the goods. The best thing to do is identify your own needs early on.

Remember that smaller suppliers can deliver with a more personal approach but may not have the capacity to meet the large demand that bigger suppliers can.

 

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