Sometimes it’s just too expensive to produce your raw materials, and opting for a supplier becomes a wiser option.
Depending on the type of business and brand, you may want to have certain control over the cost and quality of your raw materials.
Choosing the right supplier allows you this privilege and even more. If you’re currently searching for a new supplier, you may want to consider these four factors.
1. Experience
As the saying goes, ‘experience is the best teacher.’ A supplier who is well versed in their business is who you want to work with.
For example, if you’re a drills manufacturer, you want a supplier who knows what raw materials go into its production, which ones work best, which ones offer durability, etc.
A supplier with enough experience is one who can be trusted and has the expertise; these add value to your business and brand.
2. Reputation
When it comes to choosing a supplier, credibility and reputation count. Your business relies on the raw materials provided by your supplier, so you want to consider their reputation before establishing a commercial relationship.
What are they best known for? How is their customer service? Do they offer quality goods? Are they honest? These are some of the questions to answer.
A supplier with a reputation for consistently delivering your materials late will affect your production and output rate, which will eventually make your customers unhappy.
Before choosing a supplier, ensure you’ve run a background check, looked up reviews on their website, and asked their previous or current customers about their services. Ask for references too.
Do not engage a supplier until you’re convinced about their services. Your chosen supplier has a direct impact on your business, and customers will blame you should things go south.
3. Price and quality
The cost that goes into production also directly impacts the price at which the final good is sold.
Therefore, how much a supplier charges for their products and services is an essential factor to consider.
Please take a careful look at all the supplier options on your table and compare them. How much is each supplier charging, and for what service?
Always look out for a price-quality relationship; input always affects the output. Is what they intend to charge on the same scale as the quality of raw materials they’re supplying?
There should always be value for money. If your supplier charges exorbitant fees and isn’t delivering adequate raw materials, it may be a good idea to cut them off.
4. Location
It’s a fact that the price of supply affects the cost of production, which eventually affects the selling price.
When your supplier is closer to you, it reduces your delivery cost, which translates to a reduced supply cost, which leads to increased profits.
In cases where your raw materials are perishable, it’s only convenient that they are closer so that goods can be delivered quickly.
Their location also affects your lead and turnaround time, such that if supply is delivered on time, production and output rate is faster.
- DISCLOSURE – This post has been written by an outside source
