Selecting the right supplier for your business is one of the most important decisions you can make in retail.
Finding a suitable supplier can be one of the most effective methods of creating larger profit margins. However, many fail to correctly weigh up their options, making a critical error which disadvantages their own business.
Most retailers will have a choice of sales agents, wholesalers, or buying directly from manufacturers, making research a reasonably time-consuming, yet incredibly beneficial process.
Supplier strategy should be designed to meet your goals, demands, values and objectives. The first questions to ask yourself when deciding on a product supplier are:
- Do they offer the products you require?
- Can they deliver in time to meet your needs?
- Is the supplier able to deliver the quantity you want and replenish stock in suitable timescales?
- Is the price of this viable for your business?
Once you have a list of suitable suppliers, it’s time to begin contacting them and digging deeper.
Consider your options
Don’t settle for the first retail supplier you see. Speak with each of the options, build rapport, collect quotes and take time to meet suppliers. Through doing this, you are able to understand their processes, benefits and any potential issues which could arise.
Once initial suitability has been determined, ensure which of the suppliers can deliver exactly what you’re looking for. The minimum requirement is for products to be delivered within set timescales and for an acceptable price, however there are many more aspects which should be taken into account. Consider your customers’ expectations when creating a list of questions to ask.
- Are you satisfied with the supplier’s ethics and product quality?
- Have they worked with similar businesses in the past?
- Are there any additional costs?
- Are there reviews or recommendations you can trust?
- Do they have insurance or provide guarantees?
- Which services are included with the purchase of products?
- How do they resolve any issues which may arise?
- Does the retail supplier have a good reputation?
- Do they comply with necessary standards?
- Is there a minimum quantity or spend?
You must be confident in the supplier you choose. If you can’t find one which meets all of your criteria, it may be a matter of compromising. That said, if you do not believe a supplier is right for you, it could be worth continuing your search as the relationship will likely become strained.
A rigorous process will enable you to choose the best supplier for your business, highlighting the most important attributes. Negotiations can then take place to ensure both the supplier and retailer get a fair deal. If a price cannot be agreed, this system will mean you have a list of alternative options ready to explore.
Once a supplier has been chosen, it can be beneficial to have a letter of agreement made, so both parties understand their role. This can demonstrate commitment while reducing the risk of being disappointed.
Be careful not to sign any long-term service agreement unless you are fully aware of the implications. It can be worth seeking expert advice if you are handed a contract, making sure your best interests are looked after.
Selecting the right suppliers will enable you to deliver your products on time and at the right price while meeting the demands of your customers.