Red Flags to Indicate a Supplier is Not Right for Your Business
Global supply chains are on somewhat shaky ground in response to recent global events. The pandemic was one thing, and the recent energy crisis and global market disruption caused by recent Eastern European political events has also made things more uncertain than they have been in years.
All this has led to a recent phenomenon that has proven perilous for some businesses. When inventory and supplies are sourced globally – or even nationally – they can be subject to recent economic uncertainty. For this reason, companies are often too hasty in accepting a supplier for their business.
Olympic Eyewear, a wholesale bulk supplier of sunglasses, say that much of a supplier’s reliability comes down to the product they are supplying. In Olympic Eyewear’s case, inexpensive sunglasses coming in assorted batches are the type of products that sell well because they are desirable, often needed in a pinch, and very affordable.
If you want to see some economic stability throughout these uncertain times, investing in this type of inventory is very good move. But of course, not all products are like this, and it is unlikely your business will be selling only such products and nothing else. Accordingly, it can sometimes be tricky for businesses to properly evaluate their supplier.
Finding a supplier that is perfect for your business is certainly a complicated task, and it requires a detailed knowledge of the business, supplier, and product in question. Nevertheless, we cannot give advice on how to do that. We can though offer the red flags that should indicate you have a bad supplier on your hands. These apply across the board and knowing what they are is a terrific way to sift out the bad suppliers – and make the job of choosing a good one that much easier.
Here follows then a few of the red flags you should be on the lookout for when trying to optimize your business’s supply.
They Have a Lack of Experience in the Products Category
You would think that as the company is selling those products, they would have some real expertise with them. This is not, however, always the case. This is especially the case where the supplier is also the manufacturer, or sources the products you need from a manufacturer as and when they are needed.
In such cases, it is unlikely they will have experience with your product, which can lead to pricing that is off and even products that are substandard.
They Cannot Scale
You might need a certain amount of a product initially and then, following some success, you might well need even more. Is the supplier up to this? This is something you should find out before the point of scaling up comes along. The best way is just to ask them if they could supply you with more products in future – and give a figure. Then, you can look at what they offer to see if they are handling such loads with other companies.
They Want to Work Without a Contract
This red flag is much more straightforward, as you will notice it straight away. If a supplier is willing to work without a contract, then things might go well for a while but any changes in order load or in wider economic factors and they could fail you with no accountability. Always seek a contract.
Red flags should be the beginning of any supplier appraisal, and they have the potential to alert you to a bad supplier right away. Choosing a good supplier though is another matter entirely.