Supplier Vetting: Factors to Consider Before Deciding on a Supplier

Regardless of your industry involved, a peculiar segment of spend attributed to all sectors is procurement - as in one way or another, every industry, at one time or another, will need to procure items locally or internationally for production, work, promotional events, or office functionalities. With the need for procurement of goods comes the need for credible suppliers. While some organisations, businesses, or individuals choose to use the services of a 3PL partner, others still prefer to deal with the suppliers directly and do the procurement themselves.

When choosing a supplier lies on your shoulders, the stakes are enormous because making a mistake might not be an option. The following elements are the most significant when deciding which supplier to go for and should not be underestimated.

1. Price: This is the leading factor to consider when choosing a supplier. Though it is essential to procure at a very reasonable price, selecting a supplier with the lowest price may not be the best idea, as you may end up with low-quality goods or raw materials. You can look around and consider prices, join a buyers group, place orders strategically for free shipping, or even take advantage of promo seasons.

2. Quality: This is another top factor to consider while choosing a supplier because the quality of the product supplied by your supplier will determine how well your product will do in the market. Ensure that your supplier adheres strictly to specifications and that the product is up to the standard regulation; see to it that they package their products very well and label correctly, as the quality of the product has a direct impact on the amount that the product will be sold in the market.

3. Capacity: The capacity of your supplier is an essential factor to consider. Can they provide you with all you need? Can the supplier produce enough to meet your demand? Talk to them about deadlines, minimum order quantity (MOQ), and maximum production capacity.

4. Reliability: The ability of the supplier to keep to their promise is essential for organisations and businesses as there are usually projects to complete and deadlines to meet. Ensure the supplier can deliver on time, accurately provide the correct quantity and that the quality meets the standard. Before choosing this supplier, research the supplier's reputation properly by liaising with his previous customers.

5. Flexibility: Regarding procurement and order placement, changes in quantity, preference, and design could occur occasionally, necessitating flexibility for all parties involved. The capability of a supplier to accommodate the changes, retain flexibility, and still deliver on time is critical. Find a flexible supplier because flexible suppliers can process and supply several tasks besides the one for which they are the primary supplier.

6. Communication: When choosing a supplier, consider how well they communicate with their clients; this involves their ability to respond to emails fast and keep their clients abreast of the process from start to finish. Test their ordering process via samples, phone to see pickup times and responses, and email response systems, to be clear about your expectations around communication.

7. Stability: In procurement, building a long-term relationship with suppliers is essential, especially when you procure regularly, as that will make things easier. Ensure that the supplier you are choosing has been around for a while and has the potential to be around for a very long time. Going through the process of selecting a new supplier from time to time will be time-consuming, tiring, and ultimately lead to a waste of resources.

8. Payment terms and conditions: While some suppliers will insist on full payment before production and supply, others may allow part payment before production and completion of the payment after production or supply. Choose a supplier with generous payment terms to help your cash flow. Negotiate payment terms before your first order and keep your credit rating excellent by paying on time as promised.

 Take your time to properly examine suppliers and choose those that provide both cost savings and long-term value. Also consider the opportunity for growth, product innovation, and significant competitive edge in your industry.

To avoid choosing an incompetent supplier, contact a reliable sourcing agent like SARA PROCUREMENT SERVICES LIMITED and be guaranteed the best product suppliers.

Visit our physical office space at 3 Fatai Irawo Street, Ajao Estate, Airport Road, Lagos, Nigeria, or any of our warehouse touch point locations worldwide to learn more about us and utilise our services. 

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