Not all suppliers are good enough. There are factors that you should be aware of, such as proximity and distance. You should be aware that if the distance is too great, there will be significant delay in shipment. The time interval between placing an order and putting the actual products into your inventory area should be as short as possible. If the supplier is near your location, they will be able to quickly receive order in the shortest possible time. Other than a primary supplier, there should also be other suppliers nearby, who can become your backup plan. You will be able to get your products quickly without having huge transportation costs that can erode your profitability. A supplier may not be a good choice, if they don’t agree to provide competitive pricing. It’s true that suppliers are businesses, so they seek profit as well. If you can’t find suppliers with lower price offering, you won’t be able to increase your profit margin. Again, it is better to have long term relationships with registered suppliers, so you are able to maintain good pricing.
If you have good relationships, you should be able to get bulk purchase discounts. There should be a proper policy on procurement and it means that if you purchase large volume of products, you should get proper discounts. If you purchase tens of thousands of items, a $5 price difference can really be significant. It is important for you to pay attention with the quality of the product. If the supplier refuses to provide warranty, then there’s no reason for us to continue working with them. It is important to make that warranty shouldn’t be assumed, it must be in writing. If you purchase from local suppliers, it will be much easier to get the warranty processed. After a long delivery process, it is possible that the item isn’t working. In this case, we need to make sure that suppliers will agree to take the item back for repair or replacement. The cost for shipping the item back and repairing it could negate our profit, so it is important to ensure that the warranty will be honoured. Suppliers should also agree to provide good after sales support.
The quality of after sales support could depend on the nature of product. You should make sure that the supplier has enough capacity to provide the right kind of support. Suppliers may not be good enough for you if they don’t updated products range. Each day, week or month, there could be new products released, so we should make sure that suppliers quickly receive these items. If your suppliers insist on sticking to older product range, then this could affect your market competitiveness. If you continue selling outdated products, you will be left behind and customers will switch to other buyers. It is important that suppliers are cost effective, more efficient, faster and better. Their positive attributes will have direct effects to your business operations. If suppliers provide similar products, you should make sure that their prices are more attractive and you get much better supports.