Most businesses require raw materials in some form. So, before the launch of your business, you will have to narrow down on suppliers who will ship you raw materials.
How do you go about approaching them? And what are the factors you need to consider before choosing the perfect supplier for your product?
List down potential suppliers, as the first step. The Yellow pages would help you with that. You can also look at local and international exhibitions to meet potential suppliers. Online forums would help you on information on such exhibitions. You can also find peers and newbies of your ilk in such forums. Since exhibitions are a conglomeration of suppliers and vendors, you would benefit greatly with competitive prices and quality. It’s a one stop shop for you to interview several potential suppliers and get a first-hand idea of their prices and quality.
Look at other similar entrepreneurs. See if their existing suppliers would interest you. They must be well established and your risks would be minimal. If they supply to peers in the same location, you can be assured that they ship to your location and that legal terms with regard to shipping should be feasible.
Ask for quotations, once you narrow down on a few suppliers who you think, fit the bill,. Wait until you receive them from every supplier. Ask for samples, wherever appropriate. That should narrow down your search even more. If you can, take a tour of their facilities. You can have a look at their products, their manufacturing processes and their facilities.
Choose the ones that you can afford, based on the samples and their prices. There is always scope for bargain. So, sit down and talk with the supplier. Bargain as much as you can. State your requirements. Bulk orders would ensure great prices. You will have to keep shipping costs in mind when you decide on prices with the supplier. Do include that as an overhead price. Then come duty and such.
Quality of products is of utmost importance. Remember that any compromise on quality of products you receive from the supplier reflects badly on quality of your end products as well. So, test their quality thoroughly. Else, you might have to start on the wrong foot with your initial customers. You will end up replacing your products on a regular basis.
Have rock solid terms and conditions. Hire legal experts to chart that out. If you are not shipped the promised quality, you must be able to get a replacement from the supplier. Shipments must come with a guarantee. The supplier must keep his word on quality, quantity and time. Think long term. Verify whether he has resources to supply as much as you want.
Lastly, ask for references before you enter a contract with the supplier.
