Your suppliers are critical to the success of your business. The object is to find good suppliers and stick with them and there are things you can do to make sure that’s what happens, reducing your risk to finding yourself with a poor supplier.
What is the capacity of the supplier?
First you must know what it is you need in terms of units per week/month/year and then you must ensure the supplier you are considering can meet those demands. You should also investigate the supplier’s reliability. The best way to do this is by talking to other companies that use the supplier.
What is the quality of the products?
We all know how much quality can vary. Poor quality items will come back on you and you’ll have a high return rate that significantly affects your profits, and ultimately your sales. Before buying from a supplier ask to see a sample of their merchandise. When samples aren’t available ask to buy only a single unit to determine whether it meets your expectations.
What are their payment terms
Different suppliers offer different payment terms so before you move to ordering you should learn what those payment terms are. Some require you to pay cash before the goods are shipped. Others will allow you to pay by credit card, or pay an invoice within 7 to 14 days. On large shipments it is recommended take all necessary precautions. Don’t just send money unless this is a supplier you are comfortable with.
How are warranty issued handled?
How warranties are handled is very important to your business. You need to have this defined before entering into a purchase agreement with the supplier. When items must be shipped back to the supplier consider the turnaround time. Make sure the channels are established prior to you ordering.
Are they priced competitively?
Your object as a business is to be competitive against other businesses that sell similar products and to make a profit. To do that the products you buy have to be priced right. Many suppliers offer larger discounts the more products you order. With some it has to be all the same item, with others it doesn’t matter.
Where is the supplier located?
The location of your suppliers is important in relation to how fast your shipment can arrive, and what the cost of shipping will be. Almost all items are quoted FOB their location so it’s important you know what the shipping will be.
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Choosing good suppliers is critical to your business success so give it the attention it deserves.