How to find the right suppliers for your business
Finding the right suppliers is one of the most important parts of making your business a success. It doesn’t matter what industry you’re in, having reliable suppliers means you can provide your customers with quality products and services, at the right price.
Researching and finding suppliers
Once you know what goods you’d like to sell, you’ll need to do some research to find a supplier you’re happy with.
Here are some ideas to get you started on finding suppliers for your business:
- search online using a supplier database or the Yellow Pages
- attend an industry event or exhibition
- use an industry database or association website to find a list of local suppliers
- talk to other businesses to get a personal recommendation.
Key factors to think about when comparing suppliers
Once you’ve made a shortlist of potential suppliers, you’ll need to compare their services and offerings to find the best fit for your business.
Here are some of the key factors to considering when choosing a supplier:
- Price – Affordability is one of the most important factors to consider as this can affect your bottom line. However, it’s equally important to remember that cheap doesn’t necessarily represent value for money! If you pass poor quality products onto your customers, or compromise on service because of your supplier, you’ll run the risk of damaging your business’s reputation.
- Reliability – Can the supplier deliver the right goods or services on time? Having a reliable supplier is crucial. It can help you to manage your stock and set expectations for your customers about delivery and wait times.
- Large vs small suppliers – Large suppliers generally have enough resources and systems in place to make sure they can still deliver on time if anything goes wrong. However, you may be able to establish a closer relationship with a smaller supplier.
- Stability – Find out how long the supplier has been in business for. An experienced supplier might be a better choice for your business, particularly if you want to have a long-term contract, or if they’re the only supplier of a certain item. However a new supplier may be able to work with you to provide a better service allowing you to grow your businesses together.
- Location – Suppliers that are located further away might mean longer delivery times and extra freight costs. Local suppliers might be better if you need something quickly.
- Tip: Make sure you find out about delivery charges and times. If you’re making bulk orders, you might be able to negotiate free shipping or a reduction in cost if you can combine different orders.
- Supplier groups – By using only one supplier, you might be able to develop a closer business relationship with them. However, relying on only one supplier can also be risky. If that business shuts down, moves or can’t deliver, your own business could suffer. Sometimes it can be better to use a carefully selected group of suppliers, to reduce the risk of any problems occurring.
- Check the supplier - Make sure you ask for a supplier’s references and check them. You can also search the Personal Property Securities Register (PPSR) to find out if the goods the supplier is selling are being used as security for a debt or other obligation. Find out more about how the PPSR can be used to help protect your business by reading Why use the PPSR?
Review and maintain your supplier relationships
Once you’ve selected a supplier and start working with them, it’s important to continually review, evaluate and maintain your relationship with them.
Here are a few tips to help you to keep a positive relationship with your suppliers:
- Regularly monitor your suppliers against your business’s priorities – as your business and the suppliers grow, often the priorities change.
- Have regular contact with your suppliers to discuss your business progress and help you maintain stock flow.