Best Practices for Finding New and Better Vendors for Your Business
Streamlining your bottom line ensures your business can bank a record ROI. One place to start with this is your vendors. Have you grandfathered in vendors since the beginning, simply because you felt obligated to stay with them? If so, consider these vendors may not offer the best value or lowest price point compared to the competition. While loyalty is a good quality to have in friendship, it can break a business. If you are ready to search for vendors that are at the top of their game, take these tips to heart:
Benefits of Quality Vendors
According to Entrepreneur, vendors offer more than the distribution of supplies or services to your business. Vendors have the capacity to provide:
- Information to you regarding the marketplace and forecasted changes along the supply chain
- An expert appraisal of new products and their potential for your particular business
- Insider knowledge regarding your competitors and their activities, which can help you identify opportunities for growth
- Funding for marketing efforts
- Improvements in product designs
- Cost cutting measures regarding savings on products or supplies
Establishing a network of vendors capable of providing these benefits go far beyond improving your ROI. This is where you want to look at the value of vendors. If your current vendors are skimping in these aspects, then it’s time to move forward to new and better vendors.
Compilation of Vendors
When considering the replacement of vendors, start with a different route. Look at your existing vendors and determine where you can consolidate. It is far easier to work with a smaller set of vendors that are capable of providing all of the products and supplies needed by your business than to expand your vendor pool. Between the increased administration costs and networking, too many vendors equals a decreased ROI. Work with what you have before branching out to grow your vendor network.
Finding New Vendors
After you’ve determined you must source new vendors begin by making a list of your needs. Do your research to find possible vendors that can provide your supplies or products. Reach out to these vendors and request the following information:
- Quotes and/or proposals
- Pricing for the desired products or supplies
- Any available discounts
- Delivery terms
- A copy of your supplier’s financial statement
- Customer references
Take this information and follow through with any questions or concerns. After all, a weak financial statement might be a reflection of a stagnant economy rather than a faltering company. Contact the customers from the references, and ask if there have been any problems or difficulties with the vendor. Even in the instance that there have been negative issues with customers you want to know how the vendor handled them. Your goal is to overlook any personality clashes or customer-centric issues, and to see how the problems were remedied by the vendor. Once you have narrowed down your selection of vendors don’t delay in getting the ball rolling by establishing a new vendor RFP (request for proposal).
Streamlining the RFP Process
Now that you have selected a vendor to work with it is time to move on to the RFP process. Making the next move involves managing your vendors and strategizing your sourcing methods. This requires extensive administrative support. Thankfully there is technology ready to maintain your RFP process. Here at EC Sourcing Group we offer proprietary eSourcing software as your vendor management solution. Through the use of our reverse technology software and innovative FlexRFP ™ program, your ROI will increase while your vendor management issues decrease. Contact EC Sourcing Group today to consult with our team of experts.