Depending on where your business is located you have a choice of suppliers for the local area and also nationally. Some items need to come in pallet form, some in small parcels. Who you choose will largely be governed by price as in all things business. Second to this consideration, normally, is service and speed of delivery as these affect your bottom line with immediate effect.
Margins are normally quite tight so price plays a bigger roll, but getting that stock on the shelf in time to be bought is also of paramount importance. If it were all about money then suppliers would continually undercut each other as the promise of fast supply often balances the need for the lowest price.
What else really matters when choosing a supplier? What other metrics can you apply to the decision? What questions can you ask yourself and the supplier about a potential new business agreement to make sure you can have a great relationship, which helps drive sales for both parties?
Here, we will look at some other important factors to consider when choosing a supplier to work with. In this section, we ask more questions than answers because the answer is always different depending on the business.
If you want innovative products new to the market how does your potential new supplier access them? There are worldwide trade shows where these products are showcased and suppliers will also be approached frequently to take on new SKU. How does this supplier find out what is new on the market? Do they take feedback from their customers? Do they communicate the new products that are landing so you get to know them and who the market may be to help you to sell? Pick someone who will work with you, someone who can let you know about what is up and coming. Suppliers need to be an active part in the innovation chain, if they hit it right they are offering new products to you before you ask.
Look for someone who has availability if there is a problem. It’s no good building up new customers buying regular product if your supplier then runs out. Drops in supply happen but the important thing is communication – when will it be out of stock, how long for, is there a substitute that can be used in the meantime to keep the customers loyal to your store?
Also seek a supplier whose payment terms suit your business needs. Most new accounts will be payment upfront but then move to different payment terms. Make sure that this suits and that you will be able to meet requirements. Businesses holding up payment to suppliers means holding them back from driving innovation.
Deliveries – How often will your supplier be able to deliver to you? Can you have a full weekend of sales, place an order and then reliably receive that delivery into your store before your next weekend rush? Are they using their own delivery network or a shipping company? Can they offer emergency delivery on fast selling items? Or do you have to wait for your order day to get your stock? These questions can affect seasonal sales figures quite a lot.
Ease of ordering – The perfect solution here has got to be a real time stock app you can walk around with (better still, linked to your own system) which you can place an order there and then via your tablet or phone. What if you are not tech savvy? Does the supplier have a phone line you can use? Perhaps a website you can log onto and order from. Is it easy to use and up to date? Does it suggest other options for out of stock items or put them on preorder if required? Is it simple and straightforward to use?
Optimisation – Will you supplier encourage interaction between yourself and company reps who may be of interest as you sell or want to sell a lot of their products? They often provide extra team training, samples, point of sale or social media links so are well worth chatting too. Your supplier should know the main company people to put you in contact with.
Complaints – How does your supplier deal with product complaints from customers? Will they pass it onto the company? Is there a follow up?. Will a credit note be issued where fair?
A great supplier store relationship will be aided by the above points. Allowing everyone to get on with the important things in business – making sales and driving new innovation.
This feature was first published in the May 2019 issue of Pet Gazette