Most people worry about finding the right supplier for their business. Will their supplier be able to fulfil orders in time, if so, then how to identify such vendors?
Suppliers that you’ll be sourcing your products from are your partners that can either set you up to succeed or fail. Having a great relationship and understanding with your product supplier is crucial and can potentially bring many benefits along. An unreliable supplier will delay the products or compromise on quality which will eventually lead to customers taking their business elsewhere.
Many business owners are only tempted towards the best pricing conditions. Only concentrating on the low cost may mean more profits for you, but can hurt you in the long run. There are many factors that should be kept in mind before selecting the right supplier for your business. Let’s discuss them.
Steps That Lead to Successful Business Venture
Choosing Your Products
If your business was a storyline, then this is the critical point that will decide which direction your adventure will head towards.
The first logical step in starting any business is finding a niche of products and sticking to it, leaving diversification for the future you. Before you go on investing in a product line-up, you must first know your market. Try to analyze that market, identify your competition and then find a Wholesale marketplace that can stock you up with products you need to get started.
Here are a few bonus tips to help you decide on a niche:
- Go for products or services that you know about and are passionate about.
- Survey the landscape for competition.
- Avoid taking big risks in the beginning.
- Keep up with the changing trends.
- What will be your target audience, public or businesses?
Deciding the Type of Supplier
Now that you have decided on what type of products you’ll be dealing in, it’s time to decide on what type of supplier you will need. Each supplier has his own benefit and purpose, it’s up to you to decide who fits the bill.
● A Distributor:
A distributor is often considered a middleman who acquires items in bulk and sells in smaller quantities. Retail stores to online stores, all purchase from distributors since they often provide the best pricing terms.
● Drop-shipping:
Drop shipping is not a supplying entity (per-say) but is a convenient business model for many looking to start an online business shop (eCommerce). You won’t be needing a storage location for inventory, nor you need to invest in bulk buying. You simply list the products from a wholesaler online and wait for the sales to begin.
● A Manufacturer:
As the name suggests, it’s the entity that is directly involved in production of the goods. This supplier choice requires you to either have quite a bit experience in the business game or a hefty investment. You’ll be investing in bulk buying of items that will considerably lower and net you the most profit, but you’ll need an inventory storage location for them.
Quality Attributes to Look For
Now that you have decided on a supplier, let’s have a look at some quality attributes they should possess to be the right fit for you.
● Eligibility:
You should have some factors that you can judge suppliers on. Many suppliers have appropriate certifications but viewing them can be hard since they are mostly confidential about it. However, you can judge them on delivery performance, cost, turn-around times and industry experience etc.
● Financial Stability:
According to a survey, it’s said that buyers often work with suppliers who unexpectedly go out of business. You should always gauge the financial stability of a supplier before you go conducting business.
● Natural Conditions:
Mother nature does not adjust to your business ins and outs, you’ll have to work around her unpredictable nature. You should know if your, or the supplier’s area is prone to hurricanes, snow or rains. Knowing the problem is half the battle, evaluating weather related risks can help you devise a strategy for even the worst of conditions to avoid any halt in business flow.
● Checking Scalability:
Business always has its ups and downs, it’s always best to ask the supplier if the order of products can be increased or decreased as per demand. This will allow you the freedom to choose the quantity of products you want within a timeframe and won’t bound you to a specific number.
● Customer Service:
Keeping in mind that your business could accelerate at any given time, you’ll need a responsive supplier that can fulfil orders without fail. If the supplier responds to your queries negatively, or delays the response, it’s best to look elsewhere.
● Payment Terms:
Last, but not the least, payment terms are the biggest deciding factor for most businesses, at least in the beginning. Checking if the seller is comfortable with your payment requirements and does not compromise on quality is crucial.
Build A Strong Business Relationship
After the supplier is selected, developing a good working relationship with the supplier is key to always securing the best quality products. Longer history between you and the supplier will lead to deeper trust and more exclusive preferential treatment for you.
If the line of communication on both sides is solid, then any problem that arises will get resolved quickly and you might even be able to secure much more favorable terms with them.
