Even if you're a sole proprietor, you know that a successful business is more than its owner. Strong companies, no matter the size, depend on strong relationships — with customers, with partners and, of course, with vendors and suppliers — to stay afloat.
Building a team of reliable vendors isn't always easy, though. It requires patience, persistence and a keen knowledge of what works for your business and what doesn't. Key to success is starting with a long list of options, and ending with a short list of chosen vendors, a dream team of select suppliers. In narrowing down your list of potential vendors, keep the following top of mind:
- Your service requirements
- Your budget
- Your technical requirements
Build your initial list of candidatesCompile a list of potential vendors using local suppliers, or broaden your horizons by including out-of-state and even foreign vendors.
Automate your evaluationsIf you plan to evaluate several vendors, you may want to create a Request for Information (RFI), a Request for Quotation (RFQ), or a Request for Proposal (RFP) from your vendors in an effort to make the playing field as level as possible. An "RFx" is the general term to include all three types of documents.
Use word of mouthRecommendations from your peers are always your best evaluation tool. Ask around to find out who your friends and fellow business owners have worked with.
Bid for good dealsOnline bidding isn't just for large corporations. Also called "reverse auctions," this is a tool to evaluate a large number of vendors, mainly on price, to save you lots of money.
Assess technical capabilitiesIf you currently use a Customer Relationship Management (CRM) program in your organization, you'll want to make sure competing vendors are willing and/or able to use it.
Negotiate and evaluateTake notes at vendor meetings to help you remember what terms were discussed. Refer back to your notes during contract negotiations if necessary, and use them to barter with competing vendors, who may be able to offer the same suite of products or services at a better price.
If necessary, customizeDon't stop looking until you find the vendor that will give you what you're looking for. If you choose a vendor, and find out later that they can't make good on their promises, there are many more fish in the virtual sea. Move on.
- Notify existing suppliers of your search for new vendors in order to leverage better deals with them.
- Ask potential vendors thorough questions in order to solicit honest, objective answers.
- Find out when a vendor can and will ship your purchase, as shipping can be a huge differentiator when you need items quickly.