In doubt between suppliers? See 5 factors to help you decide
Dealing with suppliers involves numerous steps: surveys, checks, budgets and a lot of alignment meetings. The process of choosing the right supplier for your demand involves meetings, reviews, discussions and definitions, all to make sure that both sides gain in that relationship.
The first step is the actual choice of supplier. After identifying what your company needs when receiving the purchase order, it’s time to assess the possibilities. Usually, you will work with more than one viable option of supplier, and choosing the best one can be quite challenging.
The biggest mistake one can make is to choose a supplier without analyzing thoroughly all the qualities and faults of each option. Luckily, there are some key points that can help you make your decision more easily.
We set aside 5 of them, the most important factors to check before closing a deal with a supplier! Ready? Read below:
Price and conditions
Perhaps the price and terms of payment are the factors that weigh the most when choosing a supplier. Here, you must go back to your financial planning, and check if what was offered fits your budget and your needs.
Suppliers must offer a fair price for the service, but it is your role to negotiate so that the final price of your product is not compromised. Remember: a low price does not always mean low quality as well as a high price does not necessarily indicate a high level of quality. Find out what makes up this price by analyzing the quotations, and see if it makes sense.
Be beware of prices far above or far below what the market generally provides. High prices may be just a way of trading, as a margin to reduce the price to a level acceptable to the supplier. Low prices can hide abusive fees and contractual obligations.
And remember to see the expiration date of the quotation, because the price you see today may not be the same 3 weeks from now, and if you need to make the purchase next month, this quotation will be useless – and all your effort will be wasted.
To maintain a good relationship with suppliers, the company must set deadlines that can be met fully. Don’t forget to align your schedule with theirs, and always question whether the supplier offers a very long or very short delivery time.
You have every right to request proof of compliance with deadlines, as well as reports and statements from other customers, to have more faith in the work of the supplier.
Try to find out if the supplier has a history of unforeseen events that expand the deadlines, like accidents or shipping problems. Speaking of which, don’t forget to check the delivery options each supplier offers. Besides making a huge difference in the final price, different kinds of transport demand different deadlines, and you must be prepared for that.
Partner up only with companies that work with visions and values similar to yours and that can, in some way, enrich your production. To ensure that you are not being carried away by empty words and clichés, go beyond the institutional website and look for other customers from the supplier before closing the deal.
Find out what the partnership experience was like. Be sure to confirm whether the dialogue was easy, and if the company channels were available to resolve questions and problems.
The focus here is in the supplier’s ability to provide the service you require!
Quality is non-negotiable, and this also applies to the services provided by a supplier.
By service, we mean on-time deliveries, technical support when necessary and the support of the structure as a whole. Just imagine, if a supplier delays a delivery, then your product won’t be ready in time, your sales will be hampered, and your business may suffer reprisals from the customers.
So make sure your supplier is reliable. Check the legal and economic status of the company before closing a partnership. Request documents that demonstrate whether the supplier is indebted, facing labor proceedings or other criminal charges, and whether taxes are being paid on time. Any problem in these areas can impact your company’s image!
Speaking of image, the way the public sees your suppliers is decisive information! Like we said in the values topic, it’s important to partner up with good companies, that can enrich not only your business, but also your image.
It’s true that not every partnership will be a total win, but one cannot and must not be a total lost. To prevent that, dig in deep and find out where your possible suppliers stand on the public opinion!
You can do some research on their social media profiles, analyzing how they deal with criticism and complaints there, and also if there are any efforts towards keeping a good public image. Also, there are some websites devoted to publicizing criticism from unsatisfied customers and this is a great opportunity to check the supplier’s conduct on each situation.
Of course, there are other points you can check to make a deeper analysis on each supplier. We hope this article gives you some direction, but don’t stop here!
A nice tip is to try to choose a supplier for your company just like you do for your own personal purchases. How do you choose a store to buy from? Do you go online and look for reviews from previous customers? Do you only buy from stores that have been in business for a while?
Better yet, how do you choose someone to do a repair in your home? Everything you check before hiring this person should be checked before signing with a supplier. The care you have with your house should be extended to your company!
So, do you analyze any other criteria when choosing suppliers? Does your company have a special way to decide who to hire? Share with us! Leave your insights at the comments below!