Suppliers are the lifeblood of any industry. They provide mostly anything, from your office supplies and business equipment to raw materials for your products. Some business needs can be acquired quickly, especially if you don’t need them in bulk. This includes equipment, such as checking weight scales and more, which you can find when you go to Wedderburn website.
However, when you work with the wrong supplier, you’ll end up paying way more than necessary, receiving defective products or services, or both. The best way to find a supplier is to establish a relationship with one that can provide you with quality at an affordable price. These relationships can be rewarding for both parties, but they take time and commitment to maintain them.
It’s difficult enough to find the right supplier when you only have one criterion. But what happens when you have more than one? And how can you decide which is best? Before filling out quotes, read through this guide to understand the selection process and essential criteria.
We’ll walk you through the process, step by step, including advice on choosing the right supplier for your business.
Define Your Criteria
When looking for a supplier, it can be hard to know where to start. You might have a few different things in mind for your business but not know what you need to make the best decision. The first thing to do is define your criteria.
What are the most important qualities for you? Is it the price, quality of products or services, location, area of expertise such as IT services, or another factor like sustainability practices? Another factor to include in your criteria is the lead time, dropshipping capabilities, payment terms and conditions, quality assurance processes, communication standards, and return policy.
Once you’ve chosen which criteria are essential in your business, it will be much easier to determine which suppliers are the best option for your needs.
What to Look for in a Supplier?
Upon defining the most vital factors for your product and business, you can now look for your potential suppliers. When making the decision, it’s essential to understand what type of supplier you want and how they operate. Here are four questions that will help you filter through potential suppliers:
- What are their qualifications?
- What are their previous successes?
- How do their prices compare to your budget?
- What is their customer service like?
These questions will help you evaluate your potential suppliers and determine if they meet your predetermined criteria. Another factor to look out for when choosing your supplier is its reliability. Remember, if the suppliers let you down, you may also let your customers down.
In addition, it is vital to check the quality of supplies they provide. When your customer receives a poor quality product or service, they associate it with your business, not the suppliers. That being said, if you expect quality and reliability from your potential suppliers, make sure you’re willing to pay the right price.
Call for Bid
Bidding is one step you can take to find the right supplier. It’s a formal invitation for suppliers to present their pricing, product information, and other details about their business so that you can compare them to other potential options.
There are different types of selection processes when bidding. You could fill up either the Request for Quotation (RFQ) form or the Request for Proposal (RFP) form. Regardless of what form you choose, it must include all the details of the services or products you require. In addition, state the amount you need and the delivery dates.
Furthermore, you can also ask the bidders about the stability of the raw material supplier, the processes and procedures they utilize, and the reasons why you should establish a partnership with them.
Evaluate Bid Submissions
After receiving all the bid submissions, it is time to evaluate your options. Compare each bidder to see which one best meets your budget needs, quality standards, and overall criteria. Make sure to pay attention to the pricing because you don’t want a supplier that charges too much for supplies.
During this time, ensure the validity of the bid by requesting a product sample or an ISO compliance documentation if working with drop shippers or wholesalers.
Once you select a bid, communicate with them properly and discuss contract terms. If in doubt, you can consult a lawyer to help you draw a contract with favorable pricing conditions and protect your profit margin.
Monitor Supplier Performance
Monitoring supplier performance is an integral part of the selection process. How can you tell if a supplier is doing well or not? One easy way to identify this is through their financial records. This can be done by requesting financial statements from past years and looking for any discrepancies in the company’s revenue.
Another way to monitor performance is by meeting with your suppliers regularly to discuss challenges, issues, and successes. The goal here is to create a two-way conversation between you and your supplier so you can best understand how they are performing.
In addition to monitoring performance, make sure you pay attention to customer feedback while reviewing quotes. You want a supplier that has been able to meet the needs of other businesses just like yours.
The Bottom Line
The selection process is often one of the most difficult parts of starting a business. When you’re just starting, it can be challenging to choose the right supplier who will provide you with quality products at an affordable price. Moreover, communication, profile statistics, and willingness to work with you are required when choosing your potential supplier.