When reading the Shoe Dog by Phil Knight, I learnt that checking with your suppliers is important.
You are going to travel back and forth to ensure that whatever your suppliers will send to you is a product matching your brand.
You have to keep confirming that the product you get is up to standards with your brand.
Therefore, finding a supplier isn’t calling the next person that pops at your door or on the first page of Google.
One thing that many businesses often neglect is the choice of a supplier for their business.
Oftentimes a business only focuses on its customers and pays little or no attention to building a relationship with its supplier.
A supplier is a critical part of any business. Suppliers know what you want for your business, more than yourself. Rest assured they have your best interests at heart.
Different types of suppliers will perform different roles in your business.
It is therefore important to understand who your suppliers are, what they provide, pricing and other factors before choosing a supplier.
Who is a Supplier?
A supplier is a person, firm, company or organisation that provides goods or services to businesses.
This means that a supplier is the source of goods and services.
A supplier is responsible for contributing products or services to your enterprise.
For example, if your business trades in grocery goods and you are not in any way a farmer, a supplier will get you the groceries you need to operate in your business.
Types of Suppliers
There are different types of suppliers for different business needs.
These suppliers include:
- Manufacturers/producers. These suppliers form the first point of the supply chain. They allow business owners to buy goods directly from the production process. For example, a vegetable farmer can be a direct supplier to a grocery store. These types of suppliers are less expensive, because the products do not go through the entire supply chain.
- Distributors. These suppliers are usually brokers and wholesalers who buy in bulk from manufacturers. Distributors are responsible for transportation services. They supply small orders and mark up their prices.
- Service. Service suppliers provide their services to business owners. For example, they can supply electricity, email, make calls or supply water.
- Importers. These types of suppliers buy products from overseas and are the sole distributors of these imported commodities in the domestic country they operate in.
How Do I Choose a Supplier for My Business?
Supplier selection is the stage where a business owner decides what suppliers will get you products and services for your business and determines the risk that you are willing to take on it.
Supplier selection involves assessing and analysing the supplier you have and what offerings they give to your business and deciding on the best supplier for your business.
Supplied selection depends on the costs, reliability, service and reputation of the supplier, among other factors.
Supplier Selection Process
The supplier selection process is a step by step criterion that is used by business owners to help them choose the right suppliers for their business.
Evaluate internal needs.
When you want to select a supplier, identify what you need for your business.
This is the first step in the supplier selection process.
What do you want to trade-in?
What product range have you chosen?
This will help you choose the suppliers who operate within your product range.
Assess the supplier’s market.
Analysing the supplier market will help you determine the level of competition, their responsiveness and the ability of the suppliers to provide quality products.
Collect supplier information
Once you have assessed the market, collect information on the suppliers with whom you want to do business.
Know their names, location and price offers.
The data you have collected about your suppliers will help you choose who is more suitable for your business, based on what is important to you.
Negotiate with the supplier
Once you have found your supplier, negotiate the terms of the contract to come up with a plan that is going to work for both of you.
When you have established a middle ground, you can start your operational activities.
How Do I Approach a Supplier?
Before you start your business operations, you have to first get in touch with your supplier. Oftentimes suppliers will not come knocking on your door. You have to go out there and find them.
Here are easy ways you can use to find your suppliers.
The internet provides you with a platform to reach your suppliers with a single click.
All you have to do is do a Google keyword search and identify suppliers who operate in your niche.
Check out their profiles and contact them if you still want to do business with them.
When you know where your suppliers are located, you can visit their premises to ask if they are ready to do business with you.
Face to face interaction with potential suppliers is important to build trust between both parties.
Subscribe to a trade magazine.
Trade magazines give the inside out of business and all its elements.
You can pinpoint suppliers by reading through trade magazines and identifying those suppliers who operate in your niche.
What’s the Criteria for Choosing a Supplier for Your Business?
A good supplier has to meet certain standards in order to be employed.
Suppliers are evaluated based on a number of factors. This is what you need to look for in a supplier.
Your supplier should give you the best price terms for you to want to buy from them. Ask your supplier to quote different prices for the quantities they offer and see if it fits you.
A supplier should provide quality products for your business.
A supplier should offer you different ways in which you can make your order. For example, when you want to buy 50 bags of maize, what will be the minimum order they allow and what is the price?
Negotiate the payment terms with your supplier to know whether you will be paying on delivery on order of products. The payment term should also involve the security of products because you cannot pay for damaged goods.
A supplier should deliver quality goods on time to avoid delays and buyer inconvenience.
A supplier should practise good customer service like taking inventory and answering questions asked by the buyer.
A business owner should look at how the supplier contributes to the environment. The supplier should have a positive impact on the environment.
A supplier should give a capacity that is appealing and accommodative to a buyer’s needs. This will make him get more business deals as most business owners often buy in small orders.
A supplier should be financially stable, to avoid any inconveniences of debts or loans between him, the buyer and other businesses. Financial stability means the supplier is reputable.
What Does a Supplier Look For in You?
A supplier also wants to make sure that they find the best business owner they can work with.
A supplier’s primary focus is the value that a business owner sees in them and what process offerings they are putting on the table.
This will make them determine if they are going to supply you with the required commodities and how much of their resources they are willing to put in to make sure you get the best quality products.
When negotiating with a supplier, it is important to reach a middle ground where it is a win-win situation for both of you.
What’s the Importance of Having Qualified Supplier in Your Business?
A supplier relationship is just as important to a business owner, as a customer relationship.
A good supplier relationship has the following advantages.
- Great deals. A business owner who values his supplier is likely to get amazing deals with discounts on the price of the products he wants supplied to his business.
- Strong support. Good supplier relationship builds a strong moral and financial support between both parties because of built trust.
- Saving money. Through discounts on supply, a business owner is able to save his money for use in other parts of the business.
- Timely delivery of quality materials. Good supplier relationship ensures that the supplier delivers your products on time, to avoid delay or any misunderstandings.
- Customer satisfaction. When a supplier delivers quality products on time and he gets paid fairly for his services, both parties are pleased and happy with one another. Customers are also satisfied by the availability of products to choose from.
- More business for you. Steady supply of products ensures business continuity. All factors considered like marketing, this will also trigger the amount of sales a business makes.
Why Do You Need to Choose a Qualified Supplier in Your Business?
It is important for a business not to have only one supplier, in case of any letdowns in the near future.
When choosing a supplier, you can list down all the suppliers available for your business and cross out those who do not meet the quality standard of a good supplier.
For those who have been shortlisted, score them on their performance based on what is really important to you in a supplier. Add the total marks and whoever performed well is likely to be the ideal supplier for your business.
Importance of Having Qualified Suppliers in Your Business
Having qualified suppliers in your business benefits you in the following ways.
- Increased quality of products and services. A qualified supplier knows that quality products are the primary focus of a buyer. For this reason, they aim to supply quality products to businesses.
- Build trust. Qualified suppliers know how to build loyalty and trust between them and the buyer, considering the give and take relationship that exists between them.
- On time delivery. A qualified supplier focuses on delivering products in time to ensure there are no inconveniences on the buyer’s side.
- Business aims and objectives. A qualified supplier will help a business achieve its goals and objectives by ensuring that products are always available for sale.
- Reduced cost of product or service. A qualified supplier will ensure that they offer reduced fees on the quantity of products ordered, to ensure that they do not exploit you.
- Safety of products. Qualified suppliers want to ensure that your goods are secure and protected from any damage or theft.
Resources for Finding the Right Supplier for Your Business
- How to Choose a Supplier on Alibaba/Aliexpress in Kenya
2. How to Choose a Supplier in China for Your Kenyan Business
3. How to Choose a Supplier for Dropshipping Business in Kenya
Suppliers play an important role in the life cycle of a business.
Without the product, you will not have customers, which in turn means no sales.
Ensure you have the right suppliers for your business to save money and unnecessary frustrations in order to smooth-operate your business.
The right supplier will help you achieve your business goals.
Before working with a supplier for your business, confirm the quality of the products you get.
You must also beware of the political atmosphere in the country you want to do business in.
For example, is there a war in the country?
Is there animosity between your country and the other country?
Always look for ways to improve your products/services; come up with ways to improve your products no matter how awesome the supplier makes your products.
Ask customers for suggestions or feedback on how to improve your products.
The better products and services you provide, the longer your business lasts.
Take account of the quality, design, colour of your products.
Taking account of your products means you pinpoint where and what to improve or what things you don’t want in your product.
Sometimes, you may have to travel to your supplier’s country.
Your suppliers have to be reliable. If not, they’ll make your business not move like a well-oiled machine.
Remember no matter how nice the supplier is or your goods are, you will get criticised.
Prepare yourself for criticism from customers.
Your customers will say your shoe isn’t of good quality, doesn’t fit, the design is awful or overall, I don’t love you.
If you don’t prepare for criticism, you will close shop soon.
You may have to change suppliers, or work with different suppliers, just know the quality of the final product will differ.
Keep learning and evolving about your business and supplier.
Are you starting a business and are wondering how to find a supplier?
Are you wondering if to change your suppliers or if it’s good to work with different suppliers?
Does your supplier live in Kenya or abroad?
How do you communicate with your supplier?
Does your supplier supply you with the goods you want reliably?