Finding the right suppliers and having good relationships with them can help you give customers quality products and services at competitive prices and without interruptions. Show If your suppliers are unreliable, your business could be disrupted or unable to trade. The right suppliers will decrease the risks associated with supply chain disruptions. Having relationships with alternative suppliers can also help to mitigate these risks. On this pageWorking with various suppliers involves management skills including:
Researching and choosing suppliersBefore choosing suppliers for your business, you should conduct some research. You can research suppliers online, but you can also join networks or search industry databases and association websites. Reach out to contacts, friends or family for recommendations. There are many factors to consider when researching a potential supplier, including:
Some suppliers will provide additional support or service if you are starting up a new business—for example, they may offer flexible credit terms for the first few months or provide an extra discount on a trial basis. Use this checklist to find the best suppliers for your business. It outlines key questions to ask and what to consider when researching suppliers.
Can I find a local supplier? Benefits of local suppliers may include:
Best supplier options for your business
Can I use an overseas supplier? Overseas suppliers may offer:
Compare these benefits with the potential negatives of overseas suppliers, including:
Understand the basics of importing.
Best supplier options for your business
How stable and reliable is the supplier?
Best supplier options for your business
How important are quality and price for your business?
Best supplier options for your business
Does the supplier cause any ethical or environmental issues?
Best supplier options for your business
Do I have enough potential suppliers?
Best supplier options for your business Negotiating supplier contractsOnce you have chosen the suppliers for your business, you will need to negotiate supplier contracts. These contracts may have different names (e.g. supplier agreements, product supply agreements or supply and product contracts) but serve the same purpose. A supplier contract is a written agreement that outlines the terms of trade between your business and the supplier. Negotiations and contracts are usually based around an ongoing relationship rather than a one-time purchase. Sometimes a supplier will have their own written agreement that you can use as the basis for your contract; in other cases you will have to draft the contract. When drafting your own contract, you should refer to templated supplier contracts available on legal company websites or through industry associations. Supplier contracts should include details on:
Always get legal advice before you sign a contract. This is particularly important if there is significant risk to your business if the supplier does not provide the products or services on time and at the agreed price. How to negotiate supplier contractsNegotiation is the process where 2 or more parties reach an agreement that each one finds acceptable. Supplier contracts will often include a mix of negotiable and non-negotiable items. For example, if your business wins a government tender, some government terms regarding pricing, confidentiality and timeframes may be non-negotiable for the supplier. When negotiating supplier contracts, you and the supplier will each need to review the proposed contract and discuss any changes that are required to make the contract acceptable before signing. You might need to negotiate inclusions within the contract. To do this effectively:
Developing relationships with suppliersOnce you have a contract in place, you will need to develop and maintain a positive relationship with all your suppliers. A good supplier relationship can help to minimise business risks and ensure that you have easy access to the products and services you need. To establish and maintain good supplier relationships, you should:
Read about cash flow, invoices and payments to learn more about managing suppliers as creditors.
Sometimes a dispute between your business and a supplier will occur. You should deal with these disputes promptly. Firstly, try to resolve the matter directly with your contact at the supplier. If this does not resolve the dispute, consider these steps:
Read more about resolving business disputes. Also consider...
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