A supplier is an entity that provides products or services to another establishment. Their aim is often to provide commodities at an affordable price from the manufacturer to the distributor or retailer for them to resale. A supplier serves as an intermediary between a retailer and the manufacturer. These people are present at every stage of making a product because apart from supplying the finished product, they also supply raw materials to the manufacturer. Moreover, they are also involved in finding alternative solutions for raw materials.
There are five main types of suppliers and they include:
Service providers: These suppliers specialize in the supply of utilities such as water, energy, phone, internet service, gas among other essentials. If, for example, you are looking for HVAC parts and other indoor cooling supplies, you will need to find the right company that can offer you that.
Producers: These are organizations that innovate and manufacture products for sale. Producers are the main source of the supply chain.
Distributors/wholesalers: Are suppliers that buy products in bulk from manufacturers to resell in smaller quantities to small-scale wholesalers, local distributors, and retailers. Apart from local business people, they also supply to the government and other larger organizations.
Importers and exporters: These are suppliers who deal with inter-country supply. They get products from manufacturers in country A and supply them with distributors in country B.
All these suppliers operate within all industries worldwide. But how do you find them?
Business trade directories are the ideal place to find suppliers. You can find these directories in your local library. In case you didn’t know, libraries pay a regular subscription fee to get manufacturer and business directories. These documents contain numerous profiles of wholesalers, manufacturers, and distributors and you can find the ones you need there.
Leverage your local networks
Institutions such as Rotary clubs, Chamber of commerce, and Manufacturer associations are the source of connections in business. You can use these business networks to get a list of referrals that you need. Members of these clubs will always have a list of numerous accredited suppliers that they can endorse for you. Suppose your networks do not know the kind of supplier you’re looking for, they will know someone else who does. Overall, working with suppliers means understanding the importance of local networking, and leveraging it in the most effective way.
Local and international trade fairs
When you are in business, it is important to occasionally attend trade fairs. In an attempt to expand their businesses, manufacturers and wholesalers will always attend trade exhibitions to showcase what they are dealing in. Attending these events is an opportunity for you to meet these entities. Given that suppliers come to these platforms in great numbers, it is a chance for you to talk to them and compare them with their competitors.
Each industry has its newsletter or magazine that is published either monthly or quarterly. Most of the companies featured in these magazines are often distributors or manufacturers. These newsletters also publish contact details of these companies making it easier for you to get in touch with the supplier that interests you.
Having known how to find suppliers, how then do you work with them?
Draw a contract
Having met and agreed to work with a supplier, among the first things that you should do is enter into a legal agreement with them. While word of mouth is great, it can turn ugly should one party fail to hold their end of the bargain. Having a formal agreement ensures that you are both covered.
Additionally, when you start negotiating with them about how you are going to start working together, you should never take the first offer they give you. You are an entrepreneur, so, no matter how good the offer sounds do not settle too fast.
When you are partnering with another entity, accountability should be two-way. If your supplier promises to deliver on something, hold them to it. Do not accept excuses of any kind. In the same way, under no circumstance should you delay their payment.
Keep open communication channels
Ensure that you communicate your expectations to your supplier clearly to avoid getting disappointed. You should never assume that they know what you want. By so doing, you can avoid misunderstandings.
Understanding how to find and work with a supplier is the first step to running a business successfully. This process may take time but it is a necessity. So, the next time you think about looking for a supplier, remember these tips.