Suppliers are essential for every business; we tell you how to make the best selection to optimize your operation. Suppliers are essential for every business. Without manufacturers that provide you with the raw materials that you need for your production or that provide merchandise for your commercialization, it would cost you a lot of work to grow.
On the other hand, consider that your daily operation requires countless products and services that are also part of your costs and overhead, from clips to Internet access. In addition to providing you with what you need to do business, suppliers and import export services in UK are an important source of information to evaluate the potential of new items, track the actions of your competitors and identify areas of opportunity. Thus, they can become your partners and help you reduce costs, improve the design of a product and even ally with you to finance marketing strategies. Therefore, it is vital to make a good selection of them as part of your growth plan.
How to do it? First, it identifies the four categories in which suppliers are divided:
1. Manufacturers. Many retailers buy through the sellers of a company or independent representatives who manage the catalog of different companies. Their prices are usually lower unless the retailer's location increases the shipping cost.
2. Distributors. Also known as wholesalers, brokers or intermediaries, they are characterized by buying large quantities from various manufacturers and wineries to resell to retailers. Although they handle higher prices than those of the previous category, the shipping charge is lower and they have a shorter delivery time, which often compensates for the increase in the price per item. Also, they can fill small orders from different manufacturers.
3. Independent. In most cases, they are self-employed artisans who sell through representatives or who offer the exclusive distribution of their unique creations. They usually exhibit at trade fairs.
4. Importers. They operate similarly to a national wholesaler, only with a catalog of foreign goods. If you are not familiar with these suppliers, the alternative is to travel directly to the country of origin to acquire the merchandise that interests you.
The Basic Points
What makes a provider be good? For many growing companies, this factor focuses on the price. While it is true that this element is essential when selecting the vendors who will accompany you while you manage to consolidate your company, it is also true that there are other points that are equally important.
After the price, reliability is probably the key factor to look for. An efficient and reliable supplier will always send the right amount of items, as promised, at the agreed time and in good condition. Sometimes, someone who provides larger volumes can be more reliable, since he has the means to create backup systems and has the resources to ensure delivery in case something goes wrong.
However, do not discard those with less capacity. Think about the following: if you are a large customer for a small supplier, you are likely to have more attention, better service and security than if you are a small buyer for a large one. Tip: Analyze the advantages of splitting your orders between two small firms. This can give you a backup and, at the same time, a high profile.
Stability is another indicator that will guide you when choosing the best option. For example, the fact that a company retains its senior managers for a long time is a good sign. And if you also have a solid reputation with the rest of your clients, then it is a promising sign that it is a stable organization.
On the other hand, do not forget the location. If you order goods from someone who is several kilometers away from your business, it may take longer to get the cargo and generate additional shipping charges, especially when you need something urgently. The recommendation is that before signing any contract you investigate and prove how long it would take to deliver an order to your area of operation.
It also determines the policies regarding transportation costs. It may happen that ordering a certain amount of product you get free shipping. Or, maybe you can combine two or more orders into one and, in this way, save money on freight. All this is based on measuring the number of supplies and items you require to operate efficiently.
Finally, look for suppliers that can offer you the latest and most advanced products and services in the market. But not only that, they must also have well-trained staff, provide a variety of attractive financial conditions in your purchases, and have a realistic attitude towards you (that you are the client). That is, be willing and willing to work with you so that both parties can prosper their respective businesses.
How To Improve The Relationship
If you already have a portfolio of suppliers, you may not need to find new allies to have better agreements. After all, you can get discounts, a good service, benefits and other things you need just by requesting it. However, if it is not enough to just ask, these negotiation strategies will help you transform and strengthen some points of the relationship with your existing suppliers.
Get discounts. If you go to a department store to buy a pair of shoes, you pay the same price as any other customer. But the business-to-business transaction is more complicated. The companies that sell to other companies usually have a wide range of offers and make different discounts, depending on the amount purchased, the terms of the contract and other considerations. You can probably adjust yourself comfortably to some of those requirements and qualify for access to a lower price, an interest-free loan in the form of commercial credit or even a substantial reduction for prompt payment. To find out, first ask about the possible benefits that you can make creditor and the terms that must be met to enjoy them.
Optimize the service. It is rare for the entrepreneur to know exactly what is happening in the different areas of his organization at all times or in what situation the relationship with each of his clients is. If there is a problem related to the service provided by a provider, let them know; If you are not satisfied, go to the next person in charge, until you get what you want or reach the highest administrative level possible. It is very likely that someone does care and has enough authority to remedy the situation. If you cannot solve the problem, consider ending the relationship.
Ensure a long-term relationship. Who sells you may not offer to work more closely with you to improve the quality of service, reduce logistics errors and lower costs; although it does not necessarily mean that you do not want to do it. You might even have the impression that you are the one who is reticent. If you want a closer working relationship with your suppliers, the most practical advice to follow is to make sure they find out. As simple as that.
Better Quality Than Quantity
Having a smaller number of providers that do comply with the established is better than a large group that is not really interested in strengthening the relationship with you. Consider the following: if your portfolio is smaller, you can create closer relationships, which will allow you to work together to control expenses.
In addition, reducing the number of strategic allies with whom you deal decreases the administrative costs of your business and getting rid of problematic cases can quickly increase the efficiency of your purchasing and procurement team.
How To Decide When To Change Providers?
Here Are Some Key Points That Must Be Taken Into Account:
Lack of reliability. When shipments begin to arrive consistently late, are incomplete, damaged or incorrect, it's time to think of someone else. Although do not rush, do not forget that every company has problems from time to time. It can happen, for example, that they experience temporary difficulties as a result of the introduction of a new product line, shipping procedure or training program. If you stay by their side during a complicated interval, then you may be glad you have invested this time. They may be more willing to show solidarity with you in a future cash flow crisis.
Isolation. Some providers will allow you to visit your plants, talk to your workers, question your managers, obtain references from other clients and even examine your financial statements. This is the kind of strategic allies you should look for. The more you know about the way you work, the better tools you will have to evaluate if you continue doing business with them. Otherwise, maybe you should discard them.
Extraordinary costs. The total amount of the invoice is only the principle of the cost involved in dealing with suppliers. You must also disburse money to define the specifications of the products, request proposals and quotes to evaluate them, as well as review references. If after making the calculation, it turns out that the relationship does not suit you in economic terms, look for other options and compare them.
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