Supplier sourcing: definition and advice
There are obvious differences between large multinationals, which have extensive organizational charts and internal resources to meet all their needs, and SMEs entrepreneurs with significantly fewer resources. This is one more reason for them to use various suppliers to develop their business. Let's see in detail in this article what supplier is .
What are the types of suppliers?
A supplier is, in short, a person or company that precedes He Tuber us in creating added value. The inevitable question is: why don't we take responsibility for our supplier's activity and why don't they take responsibility for ours?
In general, we can say that the answer is that for us, the costs of organizing this activity internally are higher than the costs of a transaction with our supplier. Likewise, our supplier would not know how to make more profit by repeating what we do.
Typically, suppliers have the basic function of providing raw materials, products or services to the company they contract with.
A supplier is any person, natural or legal, who supplies the materials or services necessary for the development of a company's activity. According to this definition, we would distinguish two types of suppliers depending on the type of supply they provide.
First, there are the suppliers of goods and the providers of services. These are businesses that manufacture or sell tangible goods or materials. For e-commerce that sells physical products, this type of supplier will be the main one. This type of supplier also includes the company that provides packaging for shipping (for an e-commerce site) or those that manufacture business cards, for example. Find a useful
Then we find the service providers who are those who provide intangible goods. Examples: the company we pay for web hosting of a website, the telephone operator or the company responsible for delivering orders…
What are the responsibilities of suppliers?
There is no concise answer to this question because the options are as broad as the types of businesses or relationships we want to build with them.
Suppliers have multiple responsibilities:
They can play a leading role in terms of negotiation with companies that are part of a particular economic sector. Depending on this capacity for influence, they can even be decisive in profits, among other things because the prices they set for the products they supply have a direct effect on the accounts of the companies with which they work.
Along the same lines, they are in fact one of the determining factors of the final prices charged. If they adjust their prices or offer us advantages when concluding contracts with them, we can pass these savings on to the bottom line.
They are involved in the speed at which our products reach the market. Their speed and consistency in providing us with the goods we need in production is directly proportional to the speed at which we will have to produce our own.
Our security in business planning is marked by the reliability and punctuality with which we obtain the products or services provided by the suppliers with whom we have contracted.
How to choose a supplier (supplier sourcing)?
Let's take a look at the factors you need to consider when choosing the right suppliers for your business:
Have several alternatives before choosing a supplier. It is important to have a number of candidates among your suppliers. You may need the services of several of them, or you may not want to bet everything on a single player.
Gather as much information as possible. The more you know about the supplier, the more data you will have to make the best decision. Price, quality, transportation, experience, market reputation, payment methods, economic situation? Any information is helpful. To do this, you can consult their website, and all the information available on the Internet about this company (like societe.com for example).
You need to be clear about what your selling price will be and how it will influence the final price of your product or service. The price of raw materials or products you need from the supplier can be negotiated and you can even get discounts for large volume purchases.
Quality is closely linked to price. So choose suppliers whose products give you quality guarantees. Remember that the products you work with will influence your customer satisfaction.
Evaluate the payment forms and terms offered to suppliers, trying to find the one that suits you best. Try to find out if there is a possibility of a delay in payment or if there is an additional cost for late payment of invoices.
The location of the supplier will influence the time and cost of transportation for the goods. You will need to find the point of flexibility that will allow you to get the products from the supplier as easily as possible. Choose a supplier that offers you reliability and stability in delivery and supply.
You now know the essentials of what supplier sourcing is. It's up to you to find the right partners to better manage and develop your company's activity!
