Tags – Scouting Suppliers
Supplier scouting is a critical process for any manufacturing business.
When buyers try to locate a new supplier, they typically want to look for the lowest price.
However, focusing simply on reduced costs might be harmful in the long run.
Because shaving off a few pennies from the cost of a product is meaningless if the quality isn’t good and if the component or material doesn’t arrive when you need it.
As such, it can be difficult to find the right supplier, but if you do your research and take the time to find a quality supplier, it will be worth it in the end.
In this blog post, we will discuss what factors you should look for in a good supplier and how to change your supplier relationships.
What Makes a Good Supplier?
As briefly mentioned earlier, there should be more to a supplier than just price.
And there’s more to a supplier than the amount on the purchase order.
At the end of the day, suppliers are in business to make money too, and if you keep hammering on to them about every single bill, eventually they will stop wanting to do business with you too.
So now we know that price isn’t everything let’s look at some important factors you should look for when finding a supplier:
Reliability
Reliability is key.
Good suppliers will deliver the appropriate number of goods as promised on time, ensuring that they arrive in good working order.
Sometimes, a large supplier offers the greatest degree of dependability.
These businesses have the means to invest in backup systems and sources, allowing them to fulfil their obligations if something goes wrong.
Small suppliers, on the other hand, should not be overlooked though.
If you’re a major client of a small firm, you’ll receive more attention and perhaps superior service and dependability than if you’re a minor customer of a big vendor.
You may also benefit from dividing your purchases among two smaller businesses; it can provide you with back-up as well a high profile.
Stability
Stability is also equally as important.
You’ll want to join up with suppliers that have been in operation for a long time and haven’t switched businesses every few years.
Another favourable sign is a firm with long-tenured senior executives, and a good reputation among consumers is an encouraging indicator that the business is stable.
Look for telltale indicators of vendor problems, such as shipments that arrive before you requested them – this can be a signal of a vendor who is short on orders and in need of money.
Location
It might take a long time for you to receive goods from a distant vendor, and when they do arrive, they will almost certainly incur additional transportation fees.
Discover how long a shipment will take to reach your loading dock by visiting the carrier’s website or asking questions.
If you need something quickly, it’s possible that a distant vendor will become an issue. Determine the policies for your supplier’s freight before you place an order.
You could receive free delivery if you purchase a certain quantity, for example. Or, you might be able to combine two or more orders together and save money on shipping.
Even better, locate a comparable supplier closer to home to save money on transportation and order flexibility.
Competency
Finally, you’ll want suppliers who can provide the most up-to-date and cutting-edge goods and services.
They’ll need to have well-trained staff that can sell and maintain their products.
On purchases, they should be able to offer you a plethora of appealing financial options.
They should also have a realistic view of you, as a customer, so that they’re willing and ready to collaborate with you to develop your businesses together.
Changing Supplier Relationships
If you approach your existing suppliers, it’s certainly possible that they’ll be able to provide you with a new agreement.
You can typically get discounts, improved service, and other features if you make a request of your present suppliers; however, this may not always be as simple as asking.
Here are some of the choices and negotiating strategies for transforming poor providers into premium ones:
Getting Discounts
If you buy a pair of shoes from a department store, you’ll pay the same price as everyone else.
However, B2B commerce is more complicated.
Businesses that deal with other firms frequently have a battery of different prices to choose from, ranging from 50% to over 80% off depending on the quantity purchased, the terms, the length of the relationship, and other factors.
You may be able to satisfy some of these criteria, which will help you get a lower price. Inquire about discounts and what it takes to obtain them to discover if you can qualify.
You could receive anything from an interest-free loan in the form of trade credit to a substantial price reduction if you pay within the agreed period.
Improving Service
It’s unusual for a company leader to know exactly what’s going on in every area of their business at all times or what’s happening with all of their clients.
You probably don’t, and neither should you think your suppliers do.
If you have a service-related issue with a vendor, bring it to the attention of someone in authority.
If you don’t get what you want, move up the chain of command until you do.It’s likely that someone will be concerned and have the authority to fix the problem.
You should only terminate a relationship if you request better service but don’t receive it.
A Better Relationship
Customers don’t want to buddy up to suppliers every day, so the fact that your suppliers aren’t prepared to collaborate with you to improve quality, decrease faults, and cut costs isn’t always an indication that they don’t desire it.
If you do not have time to nurture a new relationship, it may be difficult to earn the confidence of your suppliers. They may think you are the one who is hesitant.
So, if you want a closer working connection with your suppliers, make it clear to them.You may also suggest that those who don’t want to work with you see their orders being diverted to others who are more cooperative.
No matter what, you’ll know whether it’s your supplier’s unwillingness or their perception of your reluctance that is causing the problem.
Wrapping Up
Whether you’re trying to get a better price, improve service, or establish a more collaborative relationship with your suppliers, it’s important to remember that you have options.
Now that you know what to look for in a good supplier, you can always find new suppliers if your current ones don’t want to work with you.
Finally, be sure to document everything so that you have a written record of what was said and agreed upon. This will help avoid any misunderstandings down the road.
Please get in touch with us today to find out more.
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