Taking on a new supplier
The right supplier can help improve the products and services you provide and contribute to business growth, but as with any business relationship, there are risks involved.
Knowing how to protect your business can give you peace of mind and prevent any disputes down the track.
Before you take on a new supplier, here are some steps to take:
1. Find a reliable supplier
The success of your business often relies on the quality of the suppliers you choose, so doing it right can help save you time and money in the future.
The resources below provide advice and tips on how you can find and choose the best supplier for your business:
- Our finding the right suppliers for your business topic.
- Choosing suppliers for your business on the Queensland Government’s website.
- Business Victoria’s Finding and choosing suppliers checklist.
2. Get to know the supplier
Before doing business with a new supplier, ask the right questions. Find out information about their business, operations and finances by asking questions such as:
- what their payment terms and options are
- about their general terms and conditions
- information about the supplies
- whether you need to pay extra to have supplies insured while in transit.
Talking and observing their general behaviour can give you an idea of how your business relationship may progress.
Check out our tips on how to build a stronger relationship with your suppliers.
3. Do your research
You can reduce the risk of having future issues by verifying the supplier’s information.
- Do an internet search using the supplier’s contact numbers and addresses. It's important to get the supplier's physical address. This could help if something goes wrong and you need to take legal action.
- Visit their website and social media pages to check for reviews.
- Search for their Australian Business Number (ABN) on the Australian Business Register.
- Find free information about companies, business names and licences from the Search ASIC registers on the Australian Securities & Investments Commission’s (ASIC) website.
- Search ASIC’s banned and disqualified register for information on people or organisations.
- Search the Bankruptcy Register Search (BRS) to find out if they’re bankrupt.
- If your supplier is a company, check whether they have gone into liquidation using ASIC’s Published notices search.
4. Negotiate a contract
By signing a written contract, both you and the supplier are clear on your obligations from the start.
Your contract should include:
- the goods or services to be provided
- payment terms
- delivery terms
- dispute resolution terms.
Find out how to negotiate a good contract. If you’re having problems understanding the contract terms, consider getting some legal advice.
More useful information:
- Read more information about dealing with suppliers.