Nobody does business in isolation, and if you are selling a product rather than a service then you will have to deal with a number of suppliers. They may be the people you buy your ingredients from, or they could provide the tools that you work with. They might even be the place where you get your stationery from.
Whoever they are though, you are naturally going to want to get the best deal possible and work with people you can form a positive relationship with.
Here are a few tips that can help put you on the front foot:
Find out about bulk discounts
Nobody goes to a supplier for one or two items, so the chances are that you'll be ordering high volumes. Before you come to any agreement though, it's worth ascertaining at what level the supplier will give bulk discounts.
It's common practice for suppliers to put in a price break at certain points, so ordering slightly more than you currently need could lead to a significant saving. It might feel like you're spending more cash unnecessarily, but if you can use the excess units in future then it works out in the long run.
Ask yourself if you are getting value for money
Value for money is key when it comes to dealing with suppliers. The type of bulk discount outlined above is a great example of doing it right, but there are other ways of working out whether your investment is good value for money.
Perhaps the most important measure of value for money comes from comparing the price, quality and quantity of what it is you’re ordering.
If you are spending a lot of money on a product that is of a negligibly higher quality than what you can get cheaper from a different supplier, then you are not getting good value for your money. Likewise, if a supplier offers you more product for a better price, or a higher quality item for the same as what you are currently paying, then it's definitely worth considering. If you have a good relationship with your current supplier, then it is usually worth seeing if they can match an offer made by the competition.
Work out the ROI
In a similar vein to the question of value for money, you should always consider the return on investment (ROI) when choosing suppliers and products.
Getting a good ROI really comes down to working out how much you've spent on a product vs how much you sell it on for - either on its own or as part of a new product that you assemble. Say you're selling cakes with a 20% mark-up, but one flavour – let's say carrot – frequently doesn't sell and ends up in the bin… so does your ROI.
It's probably time to pick a more popular flavour or find a cheaper alternative from a different supplier to make sure you aren't consistently losing out.
Also, if a supplier sets a price that you can't add a reasonable mark-up to then you will not be coming out of sales with a good ROI. Always do your calculations before agreeing to a purchase.
Find out if they share your values
When it comes to dealing with suppliers, most people understandably put a huge amount of emphasis on the price that is paid and the money that can be made back. In fact, that's exactly where the focus of this article has been up until now.
There is another factor that can be important when choosing a supplier though, and that's whether or not they share your values. This is especially important when it comes to green and vegan businesses. Are they a cruelty-free supplier? Do they make efforts to offset their carbon footprint? How much plastic do they use? All of these are valid concerns to base a decision on whether or not to do business with a supplier.
Of course, the ability to build a positive relationship - or not, as the case might be - can also play a part in whether or not you stick with a supplier and become a loyal customer. Depending on the supplier, you might get preferential rates if your ethos aligns, but even if you don't it will still lead to a more pleasant professional experience.