Choosing the right supplier can either make or break your business. Whether you’re going to deal in plastic insert molding or come up with a business model like Walmart, you need to work with a supplier who is most suitable to your needs and preferences. For instance, you may be required to order inventory in bulk to sell in your retail shop to your customers, or you may need raw materials for production from a supplier.
The quality of the material you use or order will ultimately impact your customers since they will be your end users, so it can either lead to satisfied or disappointed customers. Therefore, we’ll discuss several factors in this article that you need to consider when choosing the right supplier for your business. Read below to learn!
Table of Contents
1. Supplier Cost
Although very obvious, it is a primary determining point when selecting a supplier for your business. Of course, you don’t want to pay a very high price to them, as this can disrupt your budget. At the same time, not paying enough means you will have to compromise on the quality.
There will be plenty of suppliers in the market. What you can do is compare the prices of each one of them and choose the one that best suits your budget. For this, you should also do a cost-benefit analysis. Don’t forget to talk about any bulk discounts or special offers your potential supplier can offer.
2. Quality
Cost and quality are often correlated, and usually, high-quality products mean they come with a hefty price tag. However, quality isn’t only limited to the cost. In addition to this, quality can mean the condition of the product itself, the packaging of the products, etc.
Instead of purchasing items in bulk in an instant, you should first order samples and try them out. You can gather feedback from the rest of your team as well.
3. Reliability
Since you’re going to have a long-term relationship with your prospective supplier, you want to make sure they are the best. For example, they deliver the exact quantity you ordered and always deliver on time. If the delivery is late, you will be the only one to be held accountable, and it will be you whose reputation will be tarnished.
To make sure your chosen supplier is reliable, you can talk to other business owners and ask about their past experience with them. You can jot down the good and the bad of working with a certain supplier. Always try to compare two to three suppliers at a time to make the right decision.
4. Payment Terms
Payment can significantly affect the cash flow of your business, which will also impact your daily operations. Let’s say if your supplier is stringent with payment terms and requires payment to be made every month, you may struggle with paying off other operational expenses.
Therefore, you must ensure that you communicate the payment terms properly with your supplier, which should be feasible for both of you. However, you should never compromise your credit rating by delaying payments.
5. Communication
Your supplier must have effective means of communication, and they should be available to respond to you as soon as possible to keep any problems on your side at bay.
Hence, it’s better to talk to your prospective supplier before confirming the partnership about communication expectations for added convenience.
