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With rising inflation causing significant price increases on goods and services, shopping for new suppliers has been top of mind for many small business owners. But cost isn’t the only factor you should consider while weighing your options.
Whether you're a new entrepreneur searching for your first supplier or a seasoned business owner looking to make a switch, these factors should play a role in your decision.
1. Stability
The relationship you have with your supplier should be a reliable one. You want a supplier you can count on to get your products to you when you need them. It’s also important that they can communicate with you if there are any delays or issues with everyday operations. Location can impact stability — for instance, domestic suppliers have fewer hurdles to jump and may be able to avoid some supply chain delays like those seen during the COVID-19 pandemic.
2. Quality
The quality of a product is important, but so is the reputation of the supplier providing it. When searching for a new supplier, you want overall quality you can trust. The service they provide must be top-notch along with their communication skills. Having quality supplies is crucial, but if there is a lack of communication between you and the supplier, the relationship does not have the caliber it needs to last.
3. Customer service
When working with a supplier, you want to ensure there is open communication so you receive your supplies when needed. You must also be able to get in touch with your supplier if there are any issues along the way, such as needing more than originally expected or having to get products faster than usual. This is why solid customer service is so important. Before working with any supplier, it’s a good idea to determine how they communicate, either over the phone or virtually. It’s important that you know who to reach and how to reach them at all times.
4. Cost
According to the B2B Future Shopper Report 2023, 62% of businesses around the globe reported interest in new suppliers because of inflation and the high cost of living. While finding a supplier that fits the budget is necessary for any small business owner, you also don’t want to sacrifice quality for the sake of saving money. When looking at the cost of supplies, be sure to take everything into consideration, including the quality of the product and the reliability of the supply company. Even if the company is not the cheapest option, you can still try to get costs lowered by asking for any potential discounts and placing large orders in bulk as opposed to making small purchases.
5. Compatibility
Similar to any relationship, you want the one you have with your supplier to be based on compatibility. It’s smart to work with a supplier that has common values so you both are in agreement and the relationship doesn’t become strained, risking an impact on your supply chain. A better relationship with your supplier can help provide more satisfied customers and, therefore, maintain a more profitable business.
6. Ability to build credit
Many small businesses, especially startups, may not have the best credit when getting up and running. However, small business owners can boost their scores by receiving business credit from a supplier. Well-known commercial supply stores, such as Lowe’s, can offer a business line of credit to provide funds and help raise or build credit. By simply making payments on time and keeping your balance down, you can help increase your score.
