A supplier is a person, company, or organization that supplies products or services. Suppliers work as intermediaries between manufacturers and retailers. The role of a supplier is to supply high-quality products at a good price, which gives them a crucial role in the supply chain.

Suppliers, at each step of the product life cycle, play an important role and ensure the supply of high-quality products or services. In the business sector, a supplier is often referred to as a vendor.

Types of Suppliers

Manufacturers

Manufacturers are the earliest part of any supply chain and sometimes can provide products directly to the customers. Buying from manufacturers is cost-effective and possibly the easiest way. However, sometimes manufacturers can have a minimum order quantity, which many small businesses find too much.

Wholesalers

Another type of supplier can be wholesalers who buy bulk products from manufacturers or distributors at lower than market price and then resell them. Wholesalers keep their profit margin while selling the product to customers, so you may experience a relatively higher product price.

Importers

Sometimes, suppliers can import the product and export those goods, known as importers. These importers can supply directly to the customers or can supply them to the wholesalers or distributors.

All these types of suppliers have pros and cons. However, the choice of supplier can vary from business to business.

How to Choose the Best Supplier?

Here are a few characteristics to keep in mind while you are hunting for suppliers for your business.

Product Quality

Product quality should be your primary concern when choosing the best supplier for your business.

Service Quality

Supplier service quality should be an important factor impacting your decision to choose a business supplier. The service quality should include both customer service and expertise in the relevant field.

Reliability of the Supplier

Any supplier you choose should be reliable enough. A supplier should be able to complete the job in a given timeframe and should be consistent with his services. A good way to assess the reliability

Speed and Work Efficiency

Work speed and efficiency are important concerns when you are choosing a supplier. A supplier’s efficiency is crucial for you to meet your deadlines and cater to the client’s requirements.

Flexibility

The ability of suppliers to respond to changing customer needs is crucial for your business. So, always choose a supplier who is flexible with his services. It is better to ask suppliers about their strategy to cope with such a situation.

Cost of Product

Whenever choosing a supplier, compare the cost of services/products they are offering. This will help you to save any additional costs in the future. Ask suppliers about their complete breakdown of cost from the suppliers as well as any conversion charges.

Risk Assessment

Lastly, whenever you are finalizing a supplier for your business, it is advisable to conduct a risk assessment. Ask suppliers about their plans to deal with unwanted situations.

Where to Find Suppliers?

Now comes the question of hunting the potential suppliers for your business. You can go for the following options while choosing the right supplier:

  • Get references from the people around
  • Search through online directories
  • Hunt for potential suppliers on social media
  • Attend trade shows and exhibitions
  • Consult a business advisor as they have business networks
  • Online business platforms such as Seebiz.

Vendor vs Supplier

Vendors and suppliers are interchangeably used terms; however, there are major differences between the two. The differences between vendors and suppliers are as follows:

Vendor Supplier
A vendor is someone offering a product to a customer for sale. A supplier provides goods to a company or business.
B2C model B2B model
The first link in the supply chain The last link in the supply chain
Deals in a wide range of products Usually deals in a specific product line
If a supplier provides goods to the consumer then the supplier will be known as a vendor. A vendor supplying goods to another party for resale purposes will be known as the supplier.
Indirect link with manufacturers Direct link with manufacturers
Less risk High risk
Close link with customers Distant link with customers

FAQs

Q1: Can vendors become suppliers?

Ans: Yes, vendors who supply goods to a party for resale purposes are suppliers.

Q2: What are the questions to ask before choosing a supplier?

Ans: Here is what you need to ask yourself while choosing a supplier:

  • Are they able to meet your business requirements?
  • How about their financial security?
  • For how long are they serving a particular niche?
  • Are they approved by trade associations or government agencies?

Q3: What are the benefits of managing supplier relationships?

Ans: Here are a few benefits of good supplier relationship management:

  • Cost reduction
  • Minimizing the risk
  • Improved efficiency
  • Better customer management
  • Streamlined workflow
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