The Importance of Evaluating Suppliers
Quality is never an accident. It is always the result of intelligent effort”
-John Ruskin
EQ Trading Helps Reduce Your Risk
Nothing says stressful, quite like to partner with an unknown vendor or supplier. As one of the premier trading companies in the USA, EQ Trading knows that no successful business gets that way on its own. You need help from outside suppliers who have expertise in areas you don’t. How do you decide on the best vendors for your company? Some will have national or global reputations that make them an obvious choice. For others, your choice won’t be quite so clear. On top of how you’re planning to hold vendors accountable, we’ve already taken a few steps in the right direction by evaluating your potential vendor’s:
- Support Systems
- Costs
- Ethics
- Communication
- Technology
- Supply Chain
- Customer Service
- On-Time Delivery
So, with all that in mind, here are a few thoughts on evaluating and managing your vendors: Determining whether the relationship with a vendor is going to be mutually profitable. All vendor relationships, you get into must create a win-win situation on both sides. You can be sure that any vendor you work with will let you know right away if it’s not profitable for them. Likewise, if it’s not profitable for you, they need to hear about it. Profitability can’t be measured purely in gross profit dollars. Real profitability with each vendor you work with is measured in gross return on inventory investment. Factors beyond sales volume and profit margin determine this.
- What will your inventory investment be?
- How long are their lead times?
- How consistent is their product’s quality?
- How often do they miss-ship?
Remember, the only reason you’re doing business with a vendor is that you have demand for their products. When negotiating with a vendor, don’t be afraid to insist on what you need. Most of the time, they’ll give you what you ask for. Also, it is your job to manage your vendors. Allowing your vendors to manage you can be an expensive mistake to make. The wrong vendor can cut your gross profit margins, tie up your capital in unnecessary inventory, and burn through your valuable time just to fix an endless stream of problems. Be proactive with your vendors and set your expectations upfront and you’ll save time and energy so you can get back to what you’re supposed to be doing, managing your business