No matter you if are dealing in retail or the wholesale market, your business depends on your suppliers and vendors to grow. To run your business smoothly, consider many things before choosing your suppliers. In this post, we will guide you and discuss a few factors you must take into consideration. It might take a few minutes to read, but I assure you it’s worth it.
Things to Consider Before Choosing Suppliers
The first thing you need to check is what your wholesale business requires. Which product do you want to order, and what quantity do you need? You don’t have to search the entire wholesale supplier directory just focus on your niche. As a wholesaler, your customers are impatient retailers and dealers. If you don’t deliver them on time, you could lose your business.
Set your benchmark
Analyze your needs and set your benchmark. Without knowing your requirements, you won’t be able to evaluate the business deal. Determine the criteria for the deal. It usually involves price, offers, discounts, quality, the minimum level of order, and the delivery process. Find the answers to these questions first.
As a wholesaler, you need a supplier who understands the value of time and money. Someone who encourages you and helps you improve your services. You must also check the delivery gap. Sometimes, a delay in delivery not only costs you money but also a business deal.
Does their business align with yours?
The difference in business values, features, and methods ruin the essence of deals. Their business must align with yours if you want a successful work relationship to last. Assess only those businesses that sell the products you wish to offer. Do some digging to understand their business behavior. Do not rush to choose one. Keep your options open.
Ask them to show you their catalogs, visit their website, check reviews by the businesses that work with them. You can ask your colleagues in the market to get recommendations. Reviews and referrals are reliable sources of information. There are also some questions that you can ask them directly.
What are their payment terms?
Suppliers have their own payment methods and terms following their business. Clear up everything regarding payments, as sometimes you won’t be able to maintain the terms. It will become a catch-22 situation for your business. To avoid such scenarios, ask them about their payment requirements. In conjunction with this, check their return and exchange policy.
What is my normal gross edge?
In case you’re a wholesaler, ask the manufacturer how much you’re likely to make selling specific items. For instance, if your organization, for the most part, midpoints a 32% net edge and your provider says you ought to get just 25% on their items, you presumably will not want to work with them.
Do they have liability insurance?
Liability insurance protects you from any loss. Many suppliers do not offer this insurance. In case of a bad or a defective item, they refuse to take any responsibility. If you want to secure your business and ensure compensation in case of financial loss, then this question must be answered with “yes.”
What is their minimum order quantity?
Suppliers sell products in bulk and in large quantities. In a wholesale market, this is known as minimum order quantity. Many wholesalers refuse to entertain any order below this quantity.
Confirm their minimum order to check if you need this much stock or not. You can find a supplier who provides small units to prevent Dead Stock. No matter how alluring their prices and services are, you cannot stock products if you do not need them in a six-month period.
What is their cancellation procedure?
Some circumstances may force you to cancel your order. So, it’s imperative you know the cancellation procedure and cancellation fee. Some wholesale suppliers allow you to cancel the order for free before packing the order for delivery. Sometimes they do not refund you. Instead, they just credit it to your registered account to use it in the next purchase. It doesn’t matter what method they use; you should know everything.
What quality management systems do they have?
A quality management system refers to a system that improves the quality of projects and performance. As a wholesaler, you must use one to meet the requirements of your customers. The same goes for your suppliers. Ask them about the QMS they have to ensure quality consistency. Their business is linked with yours. You rely on them to grow your business. Their instability may cause your business a loss.
Finally, we recommend you know everything about your supplier. You can visit Seebiz the marketplace of your product to get information about these suppliers. Once you are armed with every detail, you can use your supplier to boost your business in no time. What questions do you ask your suppliers? Let us know in the comment box below.