How Suppliers Are Key to Your Small Business Success
In business, it is often WHO you know, rather than what, that can make the difference between sinking or swimming.
Whatever you do, make or sell, you need access to the very best suppliers in your industry. Securing the pipeline of materials and components to satisfy your customer orders is fundamental, whether you’re baking wedding cakes or building smartphone apps. And if you are developing apps, be sure to understand the app development process. Suppliers can also be important sources of industry information, acting as a barometer of the wider market.
If you develop those relationships carefully, you can glean important information on what competitors are doing, get the heads-up on new opportunities and test the waters with new products using their market knowledge. In the best cases, suppliers can become almost like business partners, identifying efficiency savings and making suggestions to improve a product or service. So it’s crucial to get these links up and running, especially as a start-up with limited resources. Here’s how best to go about it:
What makes a supplier the best?
It’s tempting to just focus on price, especially in the early days of running your business. But that would be to make a big mistake if you have ambitious plans for future growth. If you push too hard on every invoice, you’ll gain a reputation as difficult to deal with and may miss out on other things they have to offer.
Reliability is a key factor, especially if you’re sourcing a very niche product, like a Membrane Keyboard Maker, that you won’t find around every corner. Completing shipments on time and ensuring any damaged product is promptly replaced can save time, money and hassle.
Check that your supplier has back up systems and processes in place which mean they can fulfil their obligations to you even if something goes wrong. Consider splitting your supply chain between two suppliers – this can ensure you have a backup, but also make you a larger customer of a small firm, who will then be keen to make you happy.
Try to look for a vendor who has been in business for a long time as well, and watch out for any signs of instability – such as products that arrive too early and are then chased for payment immediately, which can indicate cash flow problems. Using a local supplier can also help to save on shipping costs and provide flexibility to you.
How can I negotiate?
If you’ve found a supplier who ticks all your boxes, but the price isn’t right, learn some negotiation skills quickly. Business to business suppliers are generally fluid on pricing, basing it on a range of factors including quantity purchased and the relationship they have with you. Ask about what they can do and how you can earn a discount with them.
Work out where you can source more than one product from the same vendor – ask to visit their plant and see their operation at first hand. The more you know about them, the more business you can do together. And if they won’t be transparent, that probably tells you a lot as well.
Improving your supplier relationships can not only benefit your working practices but also your bottom line. So make sure you understand these essential vendors and you’ll see improvements.
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