10 step complete guide for starting a consulting business from scratch.
Choose Your Vendors
Vendors, also called suppliers, are essential to nearly every business.
Here’s everything you need to know about finding good vendors for your new business.
What is a vendor?
A vendor, also called as a supplier, is a person or a business that sells something to your business. A restaurant, for example, buys meats, fish, vegetables, and other goods at wholesale prices and sells those goods in their restaurant at retail prices to customers.
How can you evaluate suppliers?
Evaluate suppliers by focusing on five important factors.
First, consider price. But remember that price is only one factor, so don’t stop there.
Second, consider reliability. Good suppliers will ship the right number of items, when promised, on time, and those items will arrive in good shape.
Third, consider the supplier’s stability. Suppliers that have been in business for a long time, have a great reputation and a strong record are typically better than new suppliers who just started. Suppliers that ship on time, stand behind their products, and quickly deal with problems are much better than those who give you the run-around anytime there’s an issue.
Fourth, consider the location. If you need items fast, find a supplier near you or be sure that shipping is quick. And clarify freight policies. Sometimes, suppliers will offer free shipping and other times, you will need to pay.
Finally, be sure your vendors have the items you need, in stock, at all times. Not all suppliers maintain good stock and not all do a competent job letting you know what’s out of stock and how long it will take to backorder the items you need.
What types of vendors will you need?
There are generally four types of vendors: manufacturers, distributors, craftspeople, and importers. It’s unlikely that your business will use all of them, but let’s briefly look at each.
Businesses that sell products typically buy those products through salespeople or independent representatives who handle products from different companies. So you’ll either deal directly with a manufacturer or, more typically, work with an independent representative.
Distributors are known by many names. They’re often called wholesalers, brokers, and jobbers. Distributors typically buy in quantity from several manufacturers and warehouse goods for sale to retail and online businesses.
Distributor prices are higher than a manufacturer’s prices because they need to include a margin for themselves. But distributors will often sell smaller quantities of products and for new small businesses this is important. After all, manufacturers often have a requirement that you buy a minimum quantity that’s far above what you can reasonably afford or sell quickly. And, because distributors are typically located closer to you, a lower freight bill and quick delivery often makes up for the higher cost.
Sometimes, you’ll buy items from independent crafters who sell through reps, at trade shows, or online through sites like Etsy.
Grow your business with beautiful design.
If you want to buy products made overseas, you can avoid many hassles and headaches by buying from an importer. Domestic importers operate like a wholesaler.
Of course, you can always travel overseas and buy directly from a foreign manufacturer.
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