Getting the right supplier for your business is the first critical decision you should make when making cash-flow decisions. Reliable, cost-effective, and compliant suppliers make it easier to achieve a consistent cash flow and improve customer satisfaction.
But how do you choose the right suppliers for your business? Let’s find out below.
1. Come up with a List of Criteria
There are things you will need your supplier to meet. Create a list of the criteria comprising the following items.
- The perfect lead time – the period you are willing to wait after ordering goods until they are delivered.
- A return policy – the goods’ condition that your supplier allows goods to be returned.
- Dropshipping abilities – will your supplier agree to drop goods to your customers directly?
- Payment Terms – The duration and means of payment.
2. Call for Bids
Once you have the right suppliers in mind, request bids by either filling a Request for Proposal (RFP) or a Request for Quotation (RFQ) form, share all the necessary details in the RFQ that you need your potential supplier to fill for the suppliers’ accurate rating.
3. Check Suppliers Capabilities
Check if your supplier can deliver what they say they can. You can request a sample and test if it is what you need. This can save you a lot of time and money in the long run.
4. Follow up Supplier’s Performance
Suppliers can get comfortable after securing a contract. You should ensure they maintain the quality performance they portrayed in their sample work by following up on their performance. You can check their records, and if there is a trend of lower performance, you can help them back on track using this data.
Pay Your Suppliers in Time
Once you have the best suppliers, you don’t want to jeopardize your working relationship because of cash tied up in inventories. Get help from reputable small business financiers to help you settle your suppliers in time. Talk to Painted Horse Financial to get help on how you can pay your suppliers on time when you’re low on cash.
