5 Things to Do When Scouting for New Vendors

by / ⠀Startup Advice / August 7, 2019
Every business needs to be fully stocked in order to survive. The process of stocking, however, often doesn’t work as well as it should. Being supplied by the wrong vendor means high prices, difficult relationships, and lowered value for your business all around. It’s important, then, to find the right vendor for your business. What makes a vendor “right” will be different for every business, but a few metrics — price, location, product quality — should be of critical importance. After that, it gets a bit more difficult. If you’re having difficulty finding the perfect vendor for your business’s needs, try focusing in on the following strategies:

1. Look for product-specific designators.

While it’s always important to account for logistical factors when choosing a new vendor, the ultimate consideration should always be the product you’re buying. Before you go out looking for any vendors at all, you need to have a firm understanding of exactly what product you’re wanting to buy. Don’t be afraid to get into the weeds about this — doing research always pays off.  Take NatureBox, for example. Its CBD gummies contain only broad-spectrum CBD — meaning it incorporates a whole plethora of natural compounds as opposed to most other CBD gummies, which contain only CBD isolate. Imagine you’re looking to buy CBD-infused snacks — of course you’d want to know what type of CBD they contain. It’s the same for whatever product you want from your potential vendors. If you want to find the right vendor for you, find the one pushing the right product first.
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2. Consider GPOs.

Whatever your procurement strategy is, it needs to find you the best possible vendor for your needs. Some companies maintain thousands of different vendors in order to make their businesses operate, and juggling all those different relationships is nearly impossible without letting a few slip through the cracks.  A group purchasing organization, or GPO, can be a great way to help manage the intricacies of supplier relationships. GPOs use the leveraging power of their numerous members to get the right products for the right price. If you’re looking to enlist an organization that will take the hassle out of procurement, consider using a GPO to your advantage.

3. Account for size.

Look at your company: What kind of vendor would work best for your needs? Some vendors are used to catering to massive corporations, while others are more comfortable dealing with mom-and-pop operations. Even suppliers that are dedicated to doing the best they can simply might not be a great fit for your company due to size differences.  Evaluate the qualities you most want your vendors to have. If it’s the ability to effectively and efficiently supply large quantities of the products you need, you probably need to look at larger suppliers. If you’re looking for a more hands-on supplier with a personal touch, you might want to consider smaller options. Look for the vendors that best match your needs. 

4. Consider shipping methods.

Eventually, you’ll have to consider the actual logistics of your procurement. How are you actually going to get the products you need? A vendor could be a perfect fit on paper, but you need to make sure that the way the vendor distributes works for you as well.  If a vendor is too far away, shipping could take a long time or carry unnecessary costs, especially if your vendor is traditionally focused on local business. Other vendors might have shipping methods that are incompatible with your business for financial or environmental reasons. A vendor doesn’t just make products for you; the vendor gets them to you as well. Make sure they’ll get them to you the right way.
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5. Don’t be afraid to negotiate. 

In business, very little is truly set in stone. If you find a vendor that has all the right qualities but is showing the wrong price, don’t let that discourage you. Vendors are businesses just like yours — they need clientele to survive. Don’t be afraid to go toe-to-toe with some of these vendors to make a deal work. Finding what’s best for your business is worth a little bit of negotiation.  No business makes it alone. Every company needs allies, partners, and friends to succeed. Getting the right companies to supply you with the right products is a key step in positioning your company’s network for success.

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About The Author

Editor in Chief of Under30CEO. I have a passion for helping educate the next generation of leaders. MBA from Graduate School of Business. Former tech startup founder. Regular speaker at entrepreneurship conferences and events.

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