You might be sitting on a great idea for a product or service, and a fantastic business plan that you’ve been honing for years, but if you don’t choose the right suppliers for your business, it can send your whole operation on a catastrophic nosedive. Whether you only need a couple of suppliers or a couple hundred, here are some of the most important questions you need to ask any prospective supplier…
What Is your Ethical History?
As soon as you bring a new supplier into your supply chain, their ethical credentials will become inexorably tied to yours. You’ll become complicit in any black marks on their ethical record, and will have to answer for them if they ever become a big talking point in the media. Are they committed to environmental sustainability? Do they keep to the overarching ethical standards every business is expected to keep to? Can they come up with evidence of this from a third party? Will they agree to auditing?
Do you Understand Our Business?
One of the most important factors in determining how good a supplier will be is how familiar they are with your business niche. Obviously, there are going to be companies where you don’t really need to worry about this. If you were looking to hire ground source heat pump boreholes, for example, it’s more or less a given that the suppliers on your radar will have had a decent level of experience with construction companies. However, many B2B operations will sell to a wide range of clients, and you’ll need to take extra steps to make sure they understand your needs. They should have experience with companies like yours, and should be able to demonstrate knowledge of the issues affecting your niche.
Do you Have the Speed and Capacity We Need?
Obviously, you need to ensure that a prospective supplier’s capabilities are aligned to your needs. This is particularly important for retailers, in niches where demand can dive and peak at a moment’s notice, according to a range of factors and unpredictable changes in trends. Any supplier needs to have ample resources and control over its processes, in order to react quickly to changing requirements, all the while keeping lead times down to a minimum.
What Do You Charge?
This is an obvious question, but when a lot of business owners ask after prices, they often overlook a few key facets to it. Of course, you should find out about a prospective suppliers’ pricing system, but you also need to consider the quality of their goods, and the security and efficiency of the company’s processes. It’s also important to ask them for a detailed breakdown of their charges, including delivery. Furthermore, you should ask to see typical payment terms in writing, ask about the kinds of discounts they offer other clients, the contract lengths they usually work with, and the kind of liability insurance they have in place. When you’re asking these questions, just remember that all B2B pricing is usually negotiable, and things can change drastically as your relationship progresses.