Nowadays, facing suppliers and their relationship with them is no longer a boring obligation but rather a strategic part of the business is fundamental. There are several cases where a poor choice of suppliers hurt business.
That's why we've separated 4 tips so you do not go wrong picking your next suppliers. Let's go to them:
1) Verify Previous Vendor Clients
Before hiring a supplier it is important to check if he is able to do the service or sell the product you expect in the way that meets your specifications and expectations. And what better way to do it than talking to old customers?
Always ask the company that you want to hire a reference history so that you can contact and find out more information about both the product / service provided, both on the given support and other issues of your interest.
In addition to contacting the references given by the company to be hired, also look at the portfolio of companies served and contact other companies outside the references to do the same verification
2) Make sure your vendor has the accounts up to date
Before closing any business be sure to ask your supplier's main documents like negative certificates, to find out if they have any outstanding debt, and make sure all labor charges and taxes are being paid correctly. Usually if the company has some management problem you can find out through these documents.
Also, depending on the size of the service you are hiring, do not hesitate to ask for the company's financial data, or at least try to find out if it will have sufficient working capital to complete what you need to hire. Companies may refuse to give this information, saying they are confidential, but it costs nothing to ask and be able to receive a positive response.
3) Find out more about the company
With the internet it is quite easy to know more information about your suppliers. There are several company ratings sites where you as a consumer can leave your opinion recorded about a product / service. This is the case of Complain here, a complaints site where any customer can go there and comment on the supplier if they have had bad experiences.
In addition, it is also worth researching on Google and other major social networks more information about the company, so you can check if there is a problem that happens with recurrence and that most customers complain and, more importantly, can see the company's position when they complain about its product / service. Incidentally, it is important to note that you will not be left behind when you see negative comments about your suppliers, but it is important to note in these cases how the company solved the customer problem.
4) Be wary of non-standard pricing
Not always a very low price means that the service / product will have poor quality, as not always a more expensive price will be a better indication of product / service. What is important in these cases is to understand why the price of the product / service falls far short of the market average.
Always be wary if you stay if the price budgeted stays far below or above expected. Some companies, for example, end up charging little but have contractual obligations that will get you stuck with that supplier for a long time. Others will charge a lot just to have a margin to negotiate. The important thing is, when receiving a proposal, try to understand with the supplier what led him to charge that price, even if this is described in the proposal.
Starting by choosing good suppliers is an essential first step to good Purchasing Management. If you do not already have a Control Tool for your Purchasing Management, click here and download the free demo version of our Purchasing Management Worksheet