Things to Consider When Choosing a Supplier by ApptivoAptivo


									Things to Consider When Choosing a Supplier
Your suppliers are critical to the success of your business. The object is to find good suppliers
and stick with them and there are things you can do to make sure that’s what happens, reducing
your risk to finding yourself with a poor supplier.

        What is the capacity of the supplier?
        First you must know what it is you need in terms of units per week/month/year and then
        you must ensure the supplier you are considering can meet those demands. You should
        also investigate the supplier’s reliability. The best way to do this is by talking to other
        companies that use the supplier.
        What is the quality of the products?
        We all know how much quality can vary. Poor quality items will come back on you and
        you’ll have a high return rate that significantly affects your profits, and ultimately your
        sales. Before buying from a supplier ask to see a sample of their merchandise. When
        samples aren’t available ask to buy only a single unit to determine whether it meets your
        What are their payment terms
        Different suppliers offer different payment terms so before you move to ordering you
        should learn what those payment terms are. Some require you to pay cash before the
        goods are shipped. Others will allow you to pay by credit card, or pay an invoice within 7
        to 14 days. On large shipments it is recommended take all necessary precautions. Don’t
        just send money unless this is a supplier you are comfortable with.
        How are warranty issued handled?
        How warranties are handled is very important to your business. You need to have this
        defined before entering into a purchase agreement with the supplier. When items must be
        shipped back to the supplier consider the turnaround time. Make sure the channels are
        established prior to you ordering.
        Are they priced competitively?
        Your object as a business is to be competitive against other businesses that sell similar

© 2011 Apptivo Inc. All rights reserved.
        products and to make a profit. To do that the products you buy have to be priced right.
        Many suppliers offer larger discounts the more products you order. With some it has to
        be all the same item, with others it doesn’t matter.

        Where is the supplier located?

The location of your suppliers is important in relation to how fast your shipment can arrive, and
what the cost of shipping will be. Almost all items are quoted FOB their location so it’s
important you know what the shipping will be.

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Choosing good suppliers is critical to your business success so give it the attention it deserves.

© 2011 Apptivo Inc. All rights reserved.

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