As a business owner, it’s not always the assets that you have inside the business that matter most. Sometimes it’s about having relationships with the right people outside of the business. Suppliers would certainly fall into this category. If you can find reliable suppliers, good things will happen for your business.
7 Criteria to Look For in a Supplier
Having the right supplier can make or break your success. It can mean the difference between fulfilling your customer’s orders and constantly fighting through costly bottlenecks that tie up your processes and deteriorate trust between you and your clients.
As you evaluate suppliers, here are a few simple criteria to consider:
- Team Player Mentality
The best suppliers act like valuable teammates. In other words, they aren’t constantly pitting themselves against you. Instead, they believe that your success drives their success. As such, they’re willing to work together and add value in as many different ways as possible. That’s the mark of a team player.
Depending on the industry you operate in and how technical your product line is, it may be necessary to hire suppliers who have specific certifications. Take this into account and make sure you’re asking the proper questions and/or requesting the right documentation. Carefully vetting will ensure your supplier is qualified (which gives you confidence in the quality of your products).
This may or may not be a big deal for you, depending on the types of products/parts you’re sourcing and what sort of support needs you have. However, if you have a highly technical product that requires troubleshooting, it’s nice to have a local supplier who can poke their head into your building and address issues with efficiency.
- Customer Service
Consider how a supplier plans on handling your account. Will you be placed into an automated system and given a 1-800 hotline for all customer service requests? Or will they give you the white glove treatment and offer a concierge number for around-the-clock questions and concerns?
You can learn a lot about a supplier’s approach to customer service by reviewing their website. Some companies, for example, make it very clear on their homepage that they believe in face-to-face interactions, handshakes, and personalized support whenever possible. That’s the mark of a reliable partnership.
There’s nothing inherently wrong with a new supplier, but there’s something much more reassuring about working with an established company that’s already worked all of the kinks out of their process. When all else is equal, choose the supplier who has been around the block several times.
Don’t get so focused on your current needs that you forget about scalability. You never know how much your business will grow over one year, three years, or five years. A lot can happen over time and you need a supplier who can grow with you. Take this into account.
For example, let’s say you currently need 1,000 units per month. You don’t want to hire a supplier who has a maximum order quantity of 1,200 units per month. Instead, work with a supplier that promises they can do 5x-10x your current needs. This prevents a situation where you have to choose between turning down business or switching suppliers (neither of which are desirable). Select a scalable option from the start and you won’t have anything threatening to stunt your growth.
We’ve purposefully held off on mentioning price until now because we don’t want it to be the very first thing you consider. Yes, price matters, but you can’t make it the only determining factor in your selection process. Run suppliers through these other filters first. Then and only then should you compare pricing to see what your best options are.
Adding it All Up
There’s no such thing as a perfect supplier. There will always be pros, cons, and tradeoffs. It’s up to you to figure when the pros outweigh the cons (and vice versa). It’s also worth pointing out that there are situations where it makes sense to hire multiple suppliers. This multi-source approach establishes resilience and makes you less dependent on any one company for your supply chain needs.
Regardless of what you choose to do, the hope is that this article has given you a simple and sensical lens through which you can vet suppliers for predictably positive outcomes. If we’ve been able to do that for you, we’ll chalk it up as a win!