All business owners know all too well the struggle of working with unreliable or hard to deal with suppliers. Late arrivals, pending transaction and MIA email replies. So why do we keep working with them?
The main questions is, are we tied to these companies to produce our products or services needed to continue our operations?
The Myth of one supplier
Many clients I speak with usually have a supplier in mind for their products. Cosmetics, apparel, stationary and consumables are common items small businesses have outsourced to manufactures to produce on their behalf. One issue I do encounter often, is clients that only use one supplier. Although it is important to have a well established relationship with your supplier its not a good idea not to have an alternative for unforeseen issues.
When researching your go to company its wise to research not one but two alternatives just in case your primary or even secondary manufacturer closes up shop. This unfortunately does happen from time to time. If you prepare and have already built a relationship with an alternative this may not hinder your business to much if such a case arises.
It is very common for small business owners to sell products from various suppliers with their private label branded on the item. It makes sense why its such a popular way of doing business.
Lets say your product is apparel and your selling a popular shirt top that you designed and have assembled at two of your favorite suppliers. Supplier A manufactures 75% of these shirts and Supplier B manufacturers the other 25%. If supplier B goes out of business Supplier A would probably be able to pick up the slack. However if Supplier A went out of business would Supplier B be able to pick up the 75% of product? In worst case scenario you can at least count on Supplier B to increase productivity to lets say 50% of your needs. This would allow you time to find another replacement for Supplier A.
If you had all of your product produced with Supplier A and they went out of business you may also be out of business yourself soon. This is a great example of why its a good idea to have multiple relationships with suppliers.
Why interview your supplier before signing
New business owners need to understand you are the consumer to the supplier. They are not doing you any favors or your not obligated to purchase from them.
Picture yourself at a retail store shopping for a new television. You would probably take your time reading the features on the box, looking at the price and comparing it to other brands. You might even ask a few questions about the product to the sales rep. Choosing a supplier to purchase your products from is very similar to this scenario.
Chances are you would have this New TV for a long time. And if you need repairs or warranty issues requested you would contact the store or manufacturer. When hiring a supplier for your business your essentially committing to dealing with this company for some time. Any problems you may have will need to be resolved by working with this supplier. And that can be either a pleasant task or a let say not so pleasant day, week or month.
As you did with the TV purchase do the same with your potential suppliers. Make some initial calls and ask qualifying questions you have about your needs. Below are some questions that may or may not relate to your business.
What materials do you use for these products?
Where are your materials produced? (Raw or pre assembled)
What is your exchange or return policy if I receive damaged goods?
How long are typical shipping times?
Can you ship to multiple distributing locations?
What if I need a rush order?
Are my ingredient or product under NDA?
How long have you been in business?
Where are you located?
What is your shipping cost?
Can you send me a sample?
These are some samples of questions you might want to ask. In addition to these questions you can do some research on the company online. Search their website, reviews and health of the company. If they have a horrible user experience on the website or less than average rating you have the option to keep looking.
I myself like to order a sample and see how the process is from begging to end. Usually this will give me a good idea of how they conduct business. For example; recently I ordered a sample of some promo items from an online company 2 weeks ago and still have not received any updates or the product. This is not ideal for samples.
For comparison, my current vendor I use for stationary supplies is always on top of it. When I order samples from them I tend to get them within 48 hours. In some cases by the next day. They are always prompt to answer the phone and knowledgeable about all their items. Its a pleasant experience every time.
Having a good relationship with any business you work with is important not only for productivity but also for a well balanced pleasant work environment. All outsourced needs can be applied to the interviewing process. Working with people you enjoy to speak with increases your and your staffs ability to be more productive and satisfied.
In the event you have little alternatives and its necessary to continue doing business with a hard to work with supplier. It's better to keep yourself professional and to the point. But to also be kind and understanding.