Choosing raw material suppliers isn't as daunting as it sounds. Yes, finding suppliers that meet your quality expectations, desired delivery schedule and cost structure may be challenging, but certainly not impossible. In fact, you may be surprised at all your options.
Not sure how to begin? Here is a seven-step process to help you find, evaluate and select raw material suppliers with the capabilities and capacity your business needs.
1. Set expectations.
Before you start choosing suppliers, be clear about your business requirements. Create a list of your must-have criteria to quickly narrow it down to those who may be a good fit. Include your minimum expectations of suppliers, such as:
- Speed of delivery.
- Per-unit pricing.
- Minimum order quantity.
- Return policies and procedures.
- Modes of shipping.
- Quality assurances/certifications.
- Payment terms.
2. Identify potential suppliers.
Once you clarify what you need most from your suppliers, create a list of potential providers. Some of your best sources of names include:
- Industry trade shows or past exhibitors.
- Directories, such as Thomasnet, Worldwide Brands or Wholesale Central. Unique options may exist for your particular niche.
- Colleagues or existing, but non-competing, suppliers.
3. Cull your list.
Match your list of potential suppliers with your criteria. Decide who is and isn't a possible match. For example, some companies have production facilities abroad, which makes it difficult to get materials in your hands within several days. Could this pose an issue for your business? Consider if suppliers' minimum order quantities are too high for your current needs. Reduce your list to only serious contenders.
4. Vet each supplier.
Choosing raw material suppliers has more to do with finding a long-term match than simply identifying companies that can sell you something — there are plenty of those. You want suppliers that make your job easier and help your business run more smoothly and profitably. Look into each company, assessing various aspects including:
- Financial health.
- Leadership capabilities.
- Pending litigation.
- Better Business Bureau or Dun & Bradstreet rating.
- Client list.
5. Request a quote.
Reach out to each supplier on your list of contenders and ask for a quote. Pay attention to the process and consider your key contact person. Are they easy to work with? Did they deliver the quote when promised?
6. Evaluate the finalists.
Now that you know what each supplier charges, if it makes sense for your business, ask for product samples. Consider traveling to the top three candidates. Gather as much information as possible and ask for references.
7. Make your selection.
You might give a small order to more than one supplier to see what it's like doing business with them. Or, if one supplier is a clear standout, consider giving them an initial order as a test.
This process of choosing raw material suppliers should lead you to a winner, or set of winners, to support your company's growth.
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