10 considerations for choosing providers

A supplier is an important element of any business. A supplier could be a supplier of goods or services that the company in turn resells or adds value to. The quality of the suppliers that a company has impacts or directly affects the quality of service provision. It is important to select your provider for the right reasons. While you may have sole providers from time to time, it is riskier as there is no defined service level guarantee or long-term commitment. Such providers should be avoided as much as possible. In some companies, procurement is only made from a list of vetted registered vendors that would have met the strict criteria and scrutiny. It is easy to find any type of provider. When you put considerations and conditions, you can easily filter and select those providers that meet the standards and status of your organization. There is a provider for every size and class of business. Not all providers out there are genuine partners that you can trust and build your business on. Below are considerations and tips to help you source the best vendors to partner with your business.

1. Provider capacity and reliability – How well the organization you are considering as a supplier is able to meet your needs. How long have they been in operation? What is your production capacity and the level of pressure you are already under from your existing customers? Consider the reliability and track record the company may have. You may need to talk to other clients who have already started using the services of this particular provider to get a second or third opinion. Without traceable references, you have to assume the provider is trustworthy. Also consider the stock levels that the supplier maintains at any given time. This will tell you if your order will be fulfilled instantly the next time you place an order. Some vendors don’t even keep stock, they just order from their own vendors once they receive an order, in which case you experience delays that could affect how you serve your own customers. It is important to note that the lack of reliability on the part of your suppliers has a direct impact on the reliability of the business. You can’t fully support your customers with unreliable vendors that you’re not sure you’ll find in the same place the next time you visit. Take the time to weed out those who consistently let you down.

2. Corporate value system – A company’s value system tells you what it believes in and its general work ethic. Always study value systems and choose vendors that appear to live up to their real-life value. Values ​​become habits and define the character of the people who serve you. However, some vendors simply hang values ​​on the wall and that’s where it all ends. A company would rather have 3 values ​​to advocate and live by than have 10 flowery values ​​that remain imaginary and not real. Do the values ​​tell you something about service delivery, customer focus, etc.? Find a provider that matches your values ​​and beliefs. A vendor who doesn’t cut corners in a moment to make a sale. A supplier who would rather lose the order than supply knock-offs claiming to supply originals.

3. Product quality – Most organizations prosper because they offer quality products. You may have very jovial salespeople, with a positive attitude, smiling all the time, but if the range of products you are dealing with leaves a lot to be desired in terms of quality, then your service totally spoils the growth of the business. No one will want to resell products that have not been tried and tested. One thing most customers avoid is having to deal with responses or chargebacks, as this affects profitability and reputation. I have noticed that every time I have provided goods and services to a customer and there are some concerns and answers, I have had to work more hours to retain that customer than in cases where I have provided a high quality product or service. In such cases, the customers came out and spoke highly of my business and in turn became my silent sellers.

4. Credit conditions – The payment options provided by providers help them to retain and serve their customers successfully. Most customers don’t like to party with cash the same day they receive goods or services. Customers require time to process the payment in order to strengthen their cash flows through these legal payment delays. Although the credit terms are attractive, some clients tend to abuse such facilities by overextending their credit payments. If you’re selecting a vendor, always agree on a reasonable credit line, such as 7-14 days, that’s not too short and not too long. It gives a win-win scenario. Keep in mind that you may also have clients that require the same line of credit. In cases where suppliers refuse to give you such terms, then you must also adjust your cash flow position by making sure your customers pay when you deliver the goods. I have seen companies collapse under the weight of having to finance other businesses all because they simply wanted orders and debtors. You’d rather not have the order if you don’t get the terms and your customers push for the terms. You can only give away what you have been given.

5. Proximity and Distance – This is an important consideration. You could have suppliers in other continents besides yours. Please note that there is a shipping delay that occurs between the time you place an order and the time the order arrives at your own warehouse. You may need to keep in touch with vendors that are also closing in case you run out and receive rush orders. If you manage your imports correctly, you may be able to get all your material from other continents. In this scenario, distance ceases to be a problem. However, the advantage of dealing with smaller local suppliers is that you have a backup plan and in case of returns, it is an easier process to return the product to the supplier without huge transport costs.

6. Competitive prices – Companies want to be profitable. After all, the reason companies exist is to make a solid and consistent profit for the benefit of the investor and all stakeholders. One way to increase profits is to make sure you don’t unnecessarily buy your inputs from expensive suppliers. Having registered suppliers and also a constant relationship with existing suppliers allows the customer to take advantage of prices. They can negotiate discounts for bulk purchases. In most companies, even after selecting a group of vendors to deal with both locally and overseas, there is a policy for purchasing staff to obtain 3 quotes for the same product from different vendors. The $5 difference in price makes a difference in the price of the same product. The goal is to ensure they get the best possible price to provide the same benefit to the end user.

7. Warranty issues – It’s one thing to supply a product and it’s a totally different ballgame to make sure there’s a valid warranty on it. Make it clear when you buy the product that you want a warranty card or certificate. You can only guarantee your customers based on the guarantee that the supplier gave you. This is where paying attention to detail is of the utmost importance. You should be able to return the product if it does not meet what the manufacturer claims is the proper shelf life and performance capacity. The guarantee must not be assumed but must be in writing. If you have bought in the local channel, it is easier to process your guarantee than in situations in which you go to alternative channels or markets. I once had a rude awakening when I set up a supplier in the United States of America while running a business in Zimbabwe. The huge machine took 2 weeks to arrive at my office. The machine was delivered to the customer immediately. After two weeks, the huge machine failed and he had to return to my office. Since I had not purchased the machine through established channels, I had to ship the machine back to the United States. The cost of shipping alone was equal to the profit he had received a few weeks earlier. Not worth it; rather focus on a channel that honors the international guarantee.

8. After sales support – Depending on the nature of the product you intend to purchase from a vendor, you need to establish what happens in the event that the items have been sold to you and you now require support and technical assistance. Always evaluate the ability to support you after the sale has been made. Similarly, you also need to develop or hire skills to ensure that they offer the first level of support and maintenance for the equipment you are selling.

9. Updated product range – How updated is the range of products that your supplier is giving you. There are always new products being developed daily if your supplier sticks to the old range very soon your company will be left behind. Technological advances have ensured that new, better, faster, more efficient and cost-effective product launches come to market. The goal is to make more modern products available to the market at competitive prices. This is possible because companies invest in research to ensure they make the same, if not better, products at a lower cost every time. Sometimes it’s good to partner with a supplier that has a wider range of options than when marketing a range. The wider the range, the more options you have available to choose from.

10. Lower delivery times: system efficiency – When choosing suppliers, you have to take into account how much longer you normally have to wait to receive the order or the response to your queries. Some companies grow to levels where they can no longer make individual promises to customers and keep them. You are not sure if when placing an order you will receive it instantly, after 3 days or 3 weeks. Your own customers often dictate the delivery times they need from you. In the event that you experience delays in your service, please endeavor to communicate with the customer as much as possible to ensure that delivery time issues do not affect their loyalty to your services. Partner with suppliers that have efficient systems. I usually get annoyed when I have to wait 20 minutes while a company goes through the bureaucracy. All I want in most cases is to pay, get a product with my receipt or invoice. If the supplier’s internal processes are that you

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