Vendors and suppliers are vital to almost every business. You need to keep your inventory up to date and you need the raw materials that make your company work. This means that you need to have a great rapport with the people who provide you with those supplies.
Unfortunately, many businesses don’t know what to look for in vendors. They just find the company that can give them what they need and go from there, but this shouldn’t be the case. Your vendors and suppliers should not only have the products you need, but should also be a valuable asset to your company. So whether you’re looking for fresh produce for your restaurant or tension control bolts for your construction company, make sure to think about the following guidelines before choosing a vendor.
Find out your terms and total payments
As a business owner, the first thing you need to worry about is the cost to you. You want to build a great relationship with your vendor so you can stay with them for years to come, so you need to make sure it’s worth your time by figuring out your terms and payments.
Find out if your payment terms are negotiable. Many vendors will work out payment plans that can be changed if you run into financial hardships so you can still meet your demands. You will find that most payments are due within 30 or 60 days, but some may allow you to push it to 90 if you hit a rough patch. Also, see if they offer discounts for early payments: this will help keep their ledger in the black and can offer you incentive to pay as soon as possible.
As for total payments, make sure you find out about any fees that are associated with the vendor. This can include travel fees, restocking fees or delivery fees and, once calculated, may be a deal breaker for you.
Look for stability
As mentioned earlier, you want to choose a vendor and stick with them. This isn’t just for convenience sake, but it will help you build a relationship that can help each other out in a pinch. This means that you need to find vendors and suppliers who have already been in business for a long time.
The pros of this are two-fold. First, you know that because they have been in business for a long time, they know what they are doing and they have built a reputation with other companies. Secondly, because they are established, they will have a larger client list than newer companies, which may translate into cheaper prices all around.
Also, see if the executives of the company have been in place for a while. A frequent change at the top may indicate troubles in the near future. Do your research and you’ll know just how stable the company really is.
Reliability is a must
Ask other business that use the vendor about their reliability. Finding the right price is a must for your bottom line, but if you have to deal with the hassles of an unreliable vendor you may want to look elsewhere.
Reliability means that they deliver what your ordered on time, every time. It means that you don’t have to worry about missing items every week, or late delivery times. With few exceptions, your orders should arrive when you expect them to. It also means that when an order is late or wrong, that they fix the problem as quickly as they can with great customer service.
You need to hold your vendors to a high standard because when they mess up an order, your business can suffer for it.
An often overlooked aspect of a vendor is the distance they are located from your business. In today’s connected economy, it may be an afterthought, but you have to remember: they still have to physically ship your order to you.
For the most part, dealing with a vendor that is two days away will not cause any problems: they will account for the time and ship accordingly. But what if you are in a pinch and need items quickly? If they are located locally, you could get the parts you need in minutes or hours. If not, you’ll have to wait at least a day, and then you may be charged for expedited shipping.
Vendors and suppliers are an important part of your business, so make sure you know how to chose the right one.
Gabriel Knight is a small business owner who enjoys sharing his knowledge to help other small businesses succeed. His insightful articles are published on a selection of business websites.