You've got a nice little business venture, and you're keen to sell products to the market. To do this, you need to find some suppliers. Suppliers will provide you with raw materials and other things that are essential for running your business. They're crucial, and here are three things to consider when looking for them:
Yes, this has to be the first thing we talk about as the cost of your suppliers will play a vital role in how successful your business is. If you pay too much for supplies, you end up with increased expenses. In turn, this puts more pressure on your sales team to close deals and generate lots of money.
It creates scenarios where you can easily make a loss, even if you're generating a decent amount of sales. The money coming into your business is outweighed by the money going to your suppliers. So, do the maths and ensure that you find suppliers that align with your business budget.
It is of the utmost importance that you deal with suppliers that follow ethical trading practices. The idea of ethical trading is fairly simple; it's the concept that workers are treated fairly throughout the supply chain.
For instance, if you buy raw materials from a supplier, you want to know that they pay all of their workers fairly and follow good welfare practices. There are loads of resources out there on ethical trading, even on social media. There's someone called Lisa Robinson who is very active on Twitter and posts about petitions and other issues relating to supply chains and ethical trading.
It's worth learning as much about this topic as possible so you can identify ethical suppliers for your business. This gives you a clear conscience knowing that you're working with ethical companies.
Another aspect of who you use for your supply should be their impact on the environment. This can include whether they use recyclable packaging material or energy-efficient logistics or not.
In industrial settings, this includes requesting measures such as environmental stack testing. These allow you to find out how their production methods affect the local area, in terms of air pollution, as well as what they do to combat or reduce any pollution.
Funnily enough, this wasn't that big of an issue until last year when the pandemic hit. Suddenly, businesses all over the world realized that having suppliers in different countries wasn't such a great idea. When there are issues with transportation and travel, your supply chain will be affected.
This also relates to problems on borders, which may include tax issues, and so on. In an ideal world, the best location for your suppliers is in your home country. It makes everything much easier, so be sure to look closer to home before turning your attention anywhere else.
Of course, this does impact the first point on costs as many people choose overseas suppliers as they're cheaper. Still, keep in mind their geographical location and weigh up the pros and cons before agreeing to any deals.
The middle point is really the non-negotiable one that's set in stone. You should work with ethical suppliers because it's better for everyone. With regards to the cost and location, this is more of a personal thing. It depends on your budget, as well as where your business is based. Regardless, keep all three of these things in mind when choosing your suppliers.