Are you looking to purchase some goods or materials for your company? In that case, you will need a supplier for these. Finding a good supplier is a key part of the procurement process, so if you have not already established a relationship with one (or if you have, but want to change your vendor for some reason), in this post we will discuss how to identify qualified suppliers for your business.
Vetting suppliers that will ensure that you will get your ordered goods on time and for a good price requires answers to some important questions, a lot of research and some strategic thinking on your part, but once you do that, you will probably be set with a supplier for a good time. This is because, ultimately, you want to find a vendor that you can establish a positive and lucrative business relationship with for a long time.
Here are the steps you need to take to select a supplier that can help your organization:
Do Your Research
If you are procuring an item you haven’t before, or if it’s a service you haven’t had the opportunity to deal with so far, the first thing you need to do is to research the potential suppliers.
There are several ways to do this and the first step is to make a list of five or more suppliers. From here, you can further narrow it down until you find that one vendor that meets your needs.
Here are some of the ways you can do basic research to find suppliers in your area:
- Search on Google for suppliers. While this is not something you should rely on, a quick search on Google for suppliers is a good place to start. Once you find some, be sure to visit their websites to find more about them.
- Look in trade publications, trade journals, supplier catalogs. This is a step above from a simple Google search as most qualified suppliers will be listed on these.
- Browse Yellow Pages. If you need to find a supplier in your city or area, Yellow Pages can be a good resource to do that.
- Talk with your colleagues. Finally, you can ask your colleagues and people in your industry if they have a supplier to recommend. Keep in mind, however, that what works for them may not work for you and you will still need to dig a little deeper to see if that supplier has what it takes.
Once you’ve done these (we recommend doing at least two of these steps), you should have a list of several suppliers that meet your broad needs. From here, the next step is to evaluate each of them individually.
Evaluate the Potential Suppliers
In order to reduce the risk of supplier failure, you need to conduct some of these checks:
- What is their company structure?
Does the supplier have a parent company? This is an important question as you need to know if they or someone else has control over their business objectives, direction, as well as processes and policies.
Do they work in partnership with other companies? Are these companies someone you want your company to be connected with?
- What are their operational capabilities?
Make a personal visit (or send someone in your name) to the supplier’s sales office, warehouse and manufacturing plant to see first-hand how they conduct their business. Does the place seem well-organized and everybody know what to do or is it chaotic? Even small things like a broken faucet in the toilet can be an indication that something is not right.
- Ask the supplier for refferences
Interview those that have already worked with the supplier. What do they have to say? Is it positive? Ask what convinced them to work with this particular supplier in the first place. Also, if they no longer work with them, as them to explain to you why.
- Look how they use their resources
When it comes to using resources, you should evaluate both how the supplier uses the technology and human resources. Do they use the latest technology? What do their employees say? Do they enjoy working here? You don’t want to work with someone who treats their workers poorly.
- Investigate their financial health
Is the supplier in good financial health? You can use Dun & Bradstreet to evaluate their financial stability (or instability for that matter). This will tell you if you should be working with this supplier long-term or not.
These questions will help you learn how to identify qualified suppliers that you can establish a relationship on the long run. If you have any more questions or comments about finding suppliers, let us know in the comments below the post and don’t forget to sign up for early access to Purchase Order Plus software and to like our Facebook page.