Vendors are a necessary evil in business. You’ll need to discern and start a partnership with the right consultant or vendor(s) if you want to get anywhere, but finding one in the sea of options is overwhelming, to say the least.
What do you even want in a partner? What do they need to offer, and or be able to handle? What business goals of yours do they align with? Are they working with any competition? These are just a handful of questions you might have when vetting a potential partner or vendor to work with. What are some of the most important elements to consider, however? How should you identify a vendor or choose one?
1. Know Your Requirements and Limitations
Before you even kickstart the selection and vetting process, sit down and define your requirements and limitations. What does your vendor need to provide and how much? What deliverables are available, what is the frequency you need them, and how long will a contract run? How will prices change and or fluctuate, or will they remain static? What hardware and software do they use, and does it work with your current system(s)?
The main idea behind this step is to identify everything and anything that could be a potential roadblock for your partnership and find out what must be done to remain compatible. You don’t want to be changing your entire business process just to stay aligned with a partner.
2. Create the Initial List
The next step is to create a shortlist or initial vetting of potential vendors. Absolutely make sure that everyone on your list is compatible with your requirements and limitations. Furthermore, consider the following, as well:
- Do they have the capacity to meet your needs, and scale as your business grows?
- Who has relied on them in the past, and how do they feel? Would they recommend the vendor or shy away from them?
- Do they meet approved supplier lists from trade associations and government regulatory agencies?
- Do they currently work with your competition or have they in the past?
- How old is the vendor, equipment, and systems and how long have they been in the business?
- Are they local or remote, and how will this affect the supply line?
After identifying about 10 to 20 parties, and considering all the necessary options to build your list, move on to the next step.
3. Meet the Potentials
Sometimes, a partner or contract looks great on paper, but things are quite the opposite when the actual work is started. As you narrow down your list of potential vendors, be sure to visit every single one. It may be time consuming, yes, but you can discuss the finer details face-to-face and ensure you are, in fact, compatible with one another.
4. Pay Attention to Quality
Quantity is always a concern, yes, especially when you need to develop and distribute a great deal of product or supplies. However, more important is the quality of those items. The quality of the items and products you are offering directly influences your brand’s reputation and customer loyalty. If and when the vendor is producing poor quality items, it reflects back on you.
Always put vendor items and products through a QA process to ensure it meets the demands and needs of your business, before making a final decision. Don’t just take their word for it that their product is above and beyond, make sure you see that with your own eyes.
5. Research What You Can
This may seem obvious, but it applies to nearly everything that will be affected by your new partner. If they are promising to scale their production to meet your needs, but have never done anything like it in the past, that’s a concern. If they are quoting you a reasonable price, but similar market prices are much lower, it’s another issue to consider.
Do the research and compare nearly everything and double check everything else. If they have experience developing the kind of products or items you are asking for, they should have no problem sharing their work. If they can’t provide the evidence or proof that they can handle what you need them to, don’t strike a deal until you know for sure. Hinge found that 24% of buyers – or one in four – skip the necessary research when it comes to selecting a potential supplier. That’s not good.
6. Negotiate Reasonable Terms and Conditions
Let’s say you’ve done all the homework, chosen an excellent potential partner, but run into a wall when trying to draw up a contract, it might be time to return to the drawing board. The final step is to come up with reasonable terms and conditions that work for both parties involved, but if that’s not possible, don’t move forward.
Be transparent and upfront about your requirements and needs, right from the beginning. If there’s a question whether or not the vendor or partner can handle said needs, look elsewhere.