Artemis Marketing: What to Look For When Shortlisting New Suppliers

Nowadays, with businesses so firmly intertwined, success often hinges on the strength of mutually beneficial relationships between buyers and suppliers. There will invariably come a time when supplier relationships need to be rethought. For one reason or another, businesses may need to switch suppliers at some point, whether due to rising costs, navigating GDPR compliance, balancing scalability and demand, or expanding their operations.

Whether you’re a manufacturer seeking innovative new raw material sourcing to support a new circular business model, a retailer looking for wholesale logistics and warehousing partners to support you expanding further afield, or a food service provider requiring regular, timely, and good quality produce every day, choosing the right suppliers is never a decision to be taken lightly. Selecting the best suppliers for your business is vital to sustain its growth and maintain a competitive advantage.

At Artemis, as a digital marketing agency, we are no strangers to helping businesses achieve their growth targets. However, we also know exactly how instrumental suppliers are to that success. Let’s break down how businesses can shortlist their suppliers and pinpoint the key criteria to look out for when making this pivotal decision.

Understanding your requirements

Before choosing your new business supplier(s), it’s essential to define exactly what your business needs. This involves more than simply listing required products or services – it requires a thorough evaluation of your operational model, growth projections, and customer expectations.

Consider factors such as order volumes, delivery frequencies, and seasonal fluctuations that might affect your supplier relationships, and whether any companies you shortlist can feasibly meet them both in the short and long term.

Key criteria for selecting new suppliers

Financial stability and commercial terms

While competitive pricing is important, it shouldn’t be the deciding factor in whether to pursue an agreement with a supplier. Evaluate the supplier’s financial stability, payment terms, and pricing structure to determine whether they will benefit or obstruct your business’s cash flow. Some suppliers may offer attractive bulk purchase discounts, while others may provide flexible invoice payment terms that benefit you and your cash flow.

For instance, a local wholesale bakery might offer round-the-clock deliveries with delayed payment terms, among other benefits, which could be ideal for cafes and restaurants requiring fresh products daily.

Quality assurance and consistency

Quality standards vary significantly across industries, but consistency is universally important. To confirm that your new suppliers will be able to meet your demand and standards of quality, confirm their quality control processes and request samples where applicable.

Consider how the supplier handles quality issues and what guarantees they provide to ensure peace of mind should any shortages or delays occur in the supply chain. Manufacturing businesses might require ISO certifications, while food service operations need to verify Food Standards Agency (FSA) health and safety compliance.

Supply chain resilience

Recent global events – ranging from the pandemic to recent inflation and interest rate fluctuations – have highlighted the importance of supply chain resilience. While global disruption is always possible, establishing a robust network of reliable suppliers will help to provide much-needed peace of mind during a crisis.

It’s always wise to evaluate whether your suppliers possess:

• Reliable backup systems and contingency plans
• Alternative material or product sourcing capabilities
• Efficient stock and inventory management processes
• Strong, proactive risk mitigation strategies
• Compliant, enterprise-grade cyber security and data protection processes

Trustworthy local suppliers often offer greater supply chain visibility and faster problem resolution for businesses nearby, certainly more than those further afield. For example, East Lancashire textile manufacturers working with local suppliers can better monitor production processes and quickly address quality concerns.

Technology and innovation

There’s no harm in asking pertinent questions to ensure that your suppliers can meet both your business’s current and future needs. Technology is integral to helping anticipate and manage future demand, so this could be a good subject to broach with your suppliers. Ask them the following questions as a guide:

• Do they invest in new technologies?
• Can they integrate with your systems?
• How do they validate data and anomalies?
• Which parts of their processes are automated?

Technological compatibility can significantly impact operational efficiency, whether it’s real-time asset management, ordering, logistics, or anything in between. Find common ground and see whether both your business and your suppliers can innovate and scale at the same level to meet future demand.

Building sustainable relationships

Cultural alignment

Successful supplier relationships extend beyond simply being transactional. Look for suppliers whose business values and working methods align with yours, whether it’s their approaches to problem-solving, corporate social responsibility (CSR), ethics, communication preferences, or commitments to sustainability.

Geographic considerations

Location can significantly impact your supplier relationship. Local suppliers often offer advantages from reduced transport costs (and emissions), easier face-to-face interactions, faster response times and the feeling of providing support to the local economy. However, depending on your business needs, national or international suppliers might offer benefits that outweigh these advantages, such as specialised expertise or unique products.

Evaluating your prospective suppliers

It’s imperative that you conduct thorough market research to confirm the suitability of your suppliers. Search:

• Industry directories and trade associations
• Networks like the East Lancashire Chamber of Commerce
• Trade shows and exhibitions
• Online platforms and marketplaces
• Recommendations from business peers

Once you’ve identified potential suppliers, conduct proper due diligence:

• Request and check references from existing or former customers
• Review financial statements and credit reports
• Verify industry certifications and accreditations
• Assess their client portfolio and industry reputation

Where possible, arrange trial periods or small initial orders to evaluate performance. This allows you to assess:

• Product or service quality
• Delivery reliability
• Communication and problem-solving effectiveness

Review and assess your buyer-supplier relationship regularly

Establishing supplier relationships isn’t a one-time exercise. Regular reviews help ensure continued alignment with your business needs. Schedule periodic review meetings, establish clear performance metrics and KPIs, and maintain an open dialogue about any concerns or ways to improve. It’s always wise to keep a close eye on the wider market conditions and whether this will pose any imminent or long-term difficulties for either of your businesses.

As your business grows, your supplier requirements may evolve. Regular assessment of supplier relationships ensures they continue to meet your changing needs. Consider developing relationships with multiple suppliers for critical products or services to reduce risk and maintain negotiating power.

Looking ahead

Selecting the right suppliers requires careful consideration and thorough evaluation. Remember that the best supplier relationships are those that create mutual value and support long-term business success. Take time to find partners who not only meet your current needs but can also support your future growth aspirations.

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