Supplier relations are hugely important in business. The supplier provides you with a product or service that is essential for the smooth running of your organisation, and in return you pay them a fee, either as a one-off or a regular subscription. It is a transactional relationship that benefits everyone involved.
But as a business owner, you need to stay on top of your expenses, performing regular audits of your cash flows to work out where your money could be better spent. You may realise that there is a cheaper option available, or that the product you are receiving from a supplier is not quite meeting your needs.
It may be time to reevaluate your choice of supplier. But there are so many factors to take into account when making this decision. As well as cost and quality of product, you also need to consider the relationship you have with your existing provider, the convenience of the service, and the reputation of any new supplier you choose.
To help you make the right decision,
The following article takes a look at the five most important factors to consider when choosing a new supplier.
1. Value for Money
When you run a business, you have to take the financial aspect of every decision into account. You need the product that your supplier provides, but you want to ensure you are getting the best value for money. If that means switching to a cheaper competitor, that is the sensible decision. This will help you to maximise your profit and take care of your budget. Of course there are other factors to consider. If you have a great relationship with a provider, you may not want to sacrifice this for the sake of a small amount of money. And remember, you can always negotiate or ask for a loyalty discount.
2. Quality
The quality of the product you receive is tantamount. Whether you are ordering stationary, computer equipment, or forged and cast products for industrial use, you need to know you are getting the best of the best. A good-quality item will last for much longer and may even be better value for money in the long term. If you have found an alternative product that is better-made or fulfils your needs more than your existing one, switching suppliers is a no-brainer.
3. Convenience
If a supplier’s office or warehouse is located in close proximity to yours, this makes for a very convenient relationship. It means you can easily have meetings without wasting time or money on travel, and it may also mean you can get the product directly from source without having to worry about shipping fees. Certain suppliers might offer a more convenient lead time for deliveries or a specific minimum order quantity that meets your needs.
4. Reputation
Before choosing a new supplier, you will want to perform a check on their reputation. You need to ensure that they are reliable and provide consistently good service to their customers. Check reviews or ask for testimonials from previous customers. If they have a lot of negative feedback, or even no reviews at all, this is a red flag and may mean they should be avoided. Make sure to have a conversation with the supplier to help you get a feeling for who they are and whether or not you will work well with them.
5. Relationship
Choosing a new supplier will inevitably mean breaking your relationship with your existing provider. You may have a perfectly good reason to do this, whether it’s because you have found a better product and can save a great deal of money with your new partnership. But consider the consequences of losing this business relationship. Sticking to your original provider, even though it may not provide the best value for money, may be advantageous in many ways.
You know them well and have established good communication with them. You can’t guarantee you will get this with another company, and it will take some time to build up this strong connection. Whatever decision you make, ensure you are upfront with your existing provider and provide a good reason for your actions. They may be able to offer you a new product or price that could sway your decision. But whatever the options, you must do what is right for your business.
In summary, although these are five of the most important considerations when choosing a new supplier, there may well be other factors that influence your decision. Don’t take this choice lightly, and be sure to weigh up all the pros and cons before proceeding.
