Business Tips

Why Are Your Suppliers Important to Your Business?

No business can exist in a vacuum. The services and products that you provide to your clients and customers will ultimately depend on the raw materials and tools you’re being provided with. In other words, a business is like any other system: if there’s a problem with the input, the output will likely suffer.

What are suppliers?

Any business that you’re buying from is a supplier. Even primary industries, which extract raw materials from the Earth itself, are reliant on suppliers in some form or another. After all, if you’re going to be digging, then you’ll need a spade.

For many industries, the importance of your supplier becomes even more pressing. If you’re a spade manufacturer, for example, then you’ll need a steady stream of metal and timber from which to make blades and handles.

To thrive, you’ll not only need quality supplies. You’ll also need to be sure that those supplies will arrive in a timely fashion. This is even more so if you’re dealing with products that can spoil over time, as might be the case in the world of food and drink.

What are the advantages of a good supplier relationship?

So, why should you put energy into forging a healthy relationship with your supplier? There are a few reasons.

First, if your supplier knows that you are an important and loyal customer, then you might be able to negotiate a discount. If you’re buying in large quantities, you might have even greater leverage.

Second, a good relationship with your supplier will allow them to make slight adjustments to their process, in accordance with your needs. If your premises are difficult to access at a given time of week, then having consistent deliveries from a given supplier will allow them to anticipate any difficulties, and take steps to get around them.

As well as being able to negotiate lower prices, you might be able to fix your prices for a longer term. This will help you to protect yourself and your customers against large fluctuations in price. This reduction in volatility will allow you to make better decisions for the future of your business.

In some cases, good suppliers will help you stay on the right side of the law. Being able to secure the right clothes for the job, for example, will help you to stay on the right side of the Health and Safety at Work Act.

How to judge whether a supplier is a good one?

Good suppliers are rare and valuable. You’ll want to seek them out. But how can you tell the difference between a good supplier and a bad one?

It’s a good idea to settle on a system for evaluating new suppliers over a fixed period. Decide your criteria and apply them consistently. Collect data about performance, including quantitative and qualitative insights. Then analyse them and take action.

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