Moving Beyond Price: What all to look for in a while choosing a supplier

In today’s competitive business landscape, business owners and MSMEs are under constant pressure to provide the best quality at the lowest prices. This, sometimes, makes us compromise on quality or choosing a cheap supplier to the business. However, it is important to have a supplier who is not just affordable but also meets certain requirements, which goes beyond pricing. 

Choosing the right supplier is crucial to your organization’s success. Benchmarking your supplier process against parameters such as quality, reliability, trust, delivery timelines can go a long way in winning customers. 

So, what do you need to evaluate before you make the final call? We’ve summarised all of it below for your easy reference. 

• Quality assurance and consistency: There is no hidden fact that quality of products and services has a direct impact on customer retention rate, trust and loyalty. Therefore, always look at the quality control processes, supplier’s history. Another factor you can look at is compliance, sample evaluations and testing procedures that a supplier has in place before making a purchase. 

• Reliability: A supplier’s reliability when it comes to seriousness of work can make or break your operations. The supplier’s track record in delivering on time is a chief indicator on how good he is. You can also look at production capacity, geographical location, backup plan for supply chain disruptions to determine whether he is right for you or not. 

• Tech and Innovation: With technology penetrating through everything, a supplier’s ability to opt for tech-first solutions can definitely provide a competitive edge. You should always check how automated the internal processes are, digital integration capabilities of supplier and investment in research and development to understand this better. 

• Financial health: The long term reliability of a supplier is dependent on its financial health. At the time of bulk orders, can they accommodate it, only on relationship-basis is possible if they are financially healthy. Credit ratings, working capital management and payment terms & flexibility are the basic indicators to judge the financial health of anyone. 

Before choosing a supplier, clearly outline what all areas are non-negotiable for your business and make a pros and cons list. This will help you better understand which supplier is best suited to fulfill your requirements.