Sticking To A Supplier You Can Trust

Categories Business Tips

When it comes to purchasing raw materials, supplies, or other goods for your company, there are many options for you to consider.

Suppliers are essential for the maintenance and future growth of your business.

Not only do they supply you with the materials your business needs for success, but they often go above and beyond what is normally required of them. This is the foundation of great supplier relationships and something you may wish to consider when choosing a supplier for your company.

Here are some things to keep in mind when considering buying from suppliers…

Win-Win

Establishing a long-term relationship with a supplier can be paramount in building a strong, strategic collaboration. This collaboration can result in improved supply chain efficiency, reduction in costs, and greater success and performance for both partners.

Cost Savings

After the initial set-up working with an established supplier over the long-term can save you money. Not only do you avoid the expense of re-negotiating contracts with multiple suppliers, but you are also spared the cost of poor performance and failed supplier relationships.

Improved Service

When working with a supplier over the long term, you can expect that your supplier will have a better understanding of your company’s needs, customer market, and business practices. As a result, the efficiency of their service will improve as well as more effective communication to resolve issues when they do arise.

Less Price Volatility

This tends to be a sensitive topic among procurement teams. It is important for you to consider how much price volatility you can take. Suppliers that are long-term tend to offer more modest prices and flexible pricing models to its buying customers.

To keep a fair perspective on assessing the use of suppliers with your business, there are some drawbacks you may want to take into consideration as well…

Less Innovation

When you consistently use the same supplier for all of your goods and materials, you may risk losing out on some of the creative and innovative products that are making their way into the market. Supplier diversity may open up more opportunities for you.

Greater Competition Means Lower Prices

When you are sourcing out suppliers to fulfill your materials needs, remember that suppliers want your business and are willing to lower their prices in order to make a sale with you. This drives competition between suppliers and ultimately reduces your overall cost.

Wider Network

When you reach out to a more diverse base of suppliers, you become aware of and have access to different markets, new customers, and a more extensive business network. This can only mean more opportunity and growth for your business.

Like Family

Family companies tend have more care factor and finger on the pulse. Rather than having account managers that are only helping you out with our your enquiries because they ‘have to’ as is the case with a lot of large corporate companies.

In a family company, many staff members seem to have ‘caught’ that sense of ownership causing them to be creative, and go the extra mile for it. They also call you by first name.

If you have the opportunity of leveraging the flexibility of dealing with a family company, and the staff are imbibed with a sense of ‘caring’, you may have come across a good thing.

Before you choose a supplier, understand what is best for your business and what you are looking for in a supplier.

References:

  • https://www.entrepreneur.com/article/66028
  • http://www.officeteam.co.uk/2013/10/10/the-benefits-of-long-term-supplier-relationships/
  • https://www.jaggaer.com/5-advantages-of-having-a-diverse-supplier-base/

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