by rodney • April 3, 2016 • No Comments
The process of selecting suppliers for any business is something that requires a lot of time and analysis to get right. While you can narrow down your shortlist based on factors such as the cost and quality of the goods or services provided, you’ll also want to vet potential suppliers to assess their viability as a partner for your business. This means doing additional research, particularly if a vendor is particularly critical to your operations.
It’s not unusual for businesses to check into client’s finances before giving them credit – and the reverse can be equally beneficial. After all, it’s likely you’ll be giving your suppliers a large amount of money, possibly even before the goods or services are provided. Checking the financial stability of your suppliers – by requesting information like bank statements and credit histories – can help to flag up any warning signs about the company’s long-term viability, and reduce the chances of losing money because a vendor goes under before delivering an order. What’s more, knowing that a supplier is financially stable can help to ensure you don’t have an unexpected break in the supply chain.
Examining your business partner’s shipping procedures and service providers can also be a useful part of the vetting process. Find out how products will travel to you – for example air freight or cargo ships – and consider how these modes of transportation could affect your supplies, particularly based on the speed of the shipping method and things that could go wrong.As part of this process, you may also want to contact some of your supplier’s other clients to see how they have found the reliability of deliveries.
In some cases, it may be a good idea to assess how reliable and stable a potential supplier’s suppliers are. After all, if the people they rely on to get goods and materials fall through, it could cause problems for your own business. Do your research to pinpoint any problem areas and find out what – if any – contingency plans are in place.
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