Choosing the right supplier for your business

For businesses it is vital to build strong and sustainable supplier relationships. This starts from the initial sourcing of suppliers. Hans Ziebeck, Director of Purchasing at Beacon, Britain’s leading purchasing company, gives his advice on choosing the right supplier to suit your business. – News from Beacon Purchasing

“Understand your customer
The first step when selecting a supplier is to understand your customer’s needs and requirements. We spend a great deal of our time scoping the market capacity and capability for a given supply category; look for references within the industry and have a robust selection process that ensures they fulfil the necessary financial criteria as well as the ability to supply our customers.

“Scope out the competition
Another good source of referral that is often overlooked by operators is checking out the competition. Do not be afraid of asking a select few competitors where they are sourcing products from as a starting point for finding new suppliers.

“Expect teething problems
When we work with customers looking to switch suppliers, one of the most important things we stress is not to expect perfection from day one. Once you’ve made the change, allow time for both you and your suppliers to adapt to your business needs. At Beacon we can help with all elements of the implementation and change process.

“Ask for a blind quote
Outside of working with a purchasing partner such as Beacon, we recommend asking for a blind quote first and foremost on key lines that will be required, before beginning any price negotiations. Within this quote, be sure to include low value and low volume products so you are negotiating a comprehensive ‘price file’ that meets all of the business needs. Remember, whilst a 10% saving on 70% of what you purchase may be compelling, if the remaining 30% increases by 20% then there is no overall saving at all. Try to cover as many of your needs as possible during the negotiation stages to ensure the most accurate prices.

“Agree longevity
In any negotiation on new supply you should agree some longevity on the pricing you are being offered. There is always a price to beat your current price position in the market and many suppliers will invest in a price to win your business, only to hike it up shortly afterwards. This creates challenges for the purchaser who, after bedding in a new supplier, then faces the dilemma of moving again due to new margin pressures in their business due to price hikes.

“Small businesses that are unhappy with the service from their supplier should firstly ask themselves why they are dissatisfied. Is it the price, the service, the sales representative, or is there simply a better offer available? Our advice would be to meet with existing suppliers, keeping all of the above questions in mind, and be completely open with concerns, giving them the opportunity to resolve the issues. In our experience, this can often lead to some of the best supplier deals. Remember that any change in supply chain requires major thought with regards to the change management process, along with consideration for the wider reaching impact on the business. “

For more information about Beacon please visit www.beaconpurchasing.co.uk or follow Beacon on Twitter @Beacon_YPP.

DISCUSS

Share Your View

Hotel Industry Magazine: http://www.hotel-industry.co.uk | Articles (RSS) | Contact | Privacy Policy | Terms and Conditions
© 2015, Jamieson Media, a UK Registered Partnership