Being partners with good, reliable suppliers is vital in starting a business. You’ll need to find the right suppliers who can meet your business needs, whether you’re looking for stocks or sourcing raw materials. If you can’t get stocks for your merchandise or parts for your product ideas, you’ll lose your ability to sell products to your customers at the right time and price. In other words, having the right suppliers to work with is important in providing customers with competitively-priced quality products.
Different Types of Suppliers
According to Entrepreneur, there are four main types of suppliers. Most suppliers are manufacturers who produce products or raw materials. Oil extraction experts work with refineries to produce raw materials from fossil fuels. When processed, fossil fuels can be turned into many materials, including gasoline, feedstocks, and lubricants.
Manufacturers make up most of the number of suppliers. You’ll be connected to them through independent representatives or company salespeople. Considering you are getting materials from the source, you can always get the lowest prices from them. However, shipping costs can affect prices if a manufacturer is located far away from your facility.
Other suppliers are distributors. They are also sometimes referred to as brokers or wholesalers. They source materials in huge volumes from several manufacturers and keep them in a distribution warehouse. These materials, sometimes products, are sold to individual businesses or retailers, such as your company. Their prices are higher than manufacturers because of warehouse handling costs, plus shipping.
Some suppliers are craftspeople who work independently. Often, they are small-scale businesses, if not working alone. You can see them mostly at trade shows selling their unique creations. If you work with them, you can get an exclusive distribution of their products and, at times, influence the design of their crafts. Costs, however, can be high or low, depending on market prices.
Your fourth option is import sources. You can either work with a local supplier who imports products or materials or an overseas supplier.
Where to Find Suppliers
Finding the right suppliers is, according to Shopify, a unique process that is often challenging. Good suppliers are hard to find. This guide will help you know where and how to find the right suppliers for your business.
Nothing beats good research skills when you’re looking for suppliers. All you have to do is search online for suppliers specific to your needs. There are different online sources you can check out, including:
There are online directories specifically developed to list all different types of suppliers of all sizes. Locally, some of the biggest online directories include Kompass, MFG, Maker’s Row, Liquidation, and the oldest, ThomasNet. Others also include SaleHoo, Tuesday Morning, Big Lots, World Wide Brands, Wholesale Central, and Trade Good.
However, if you can’t find a specific material or product locally, you can checkout online directories for international suppliers. Some of the most popular include Sourcify, Indiamart, Alibaba, and Oberlo.
You can also search through local groups such as associations and LinkedIn groups. The National Association of Manufacturers, for example, has a comprehensive list of members that you can tap into for sources. On the other hand, LinkedIn hosts many groups of manufacturing companies and people in the industry who can help you out.
Here’s one great example of the benefit of networking skills. If you’ve built a huge network of business contacts, you will most likely find someone who can refer you to good suppliers.
Ask people from your professional network for any recommendations. Or ask someone successful in the same industry as you are for supplier-sourcing tips.
You can also join LinkedIn and Facebook groups of business owners who are running e-commerce websites. Some of their discussions include sources of good suppliers. They also provide reviews of manufacturers, which is helpful information for its members.
Shopify suggests using the North American Industry Classification System (NAICS) codes when searching for suppliers. It is a system used for industry research.
All industries and the products they produce are classified according to a NAICS code. Companies often use it to target businesses for marketing reasons. However, you can use it for sourcing suppliers specific to your industry.
The NAICS directory is available at your local library, or you can check out their website.
Check for Credibility
When you’ve narrowed down your list to include only the best potential suppliers, you also need to check their credibility. Aside from peer review, you can go to the Better Business Bureau (BBB) website and search for a particular supplier if there were past complaints filed against them. A supplier’s Facebook page is also a source of reviews left by customers. When you’ve finally confirmed the credibility of your prospective suppliers, you can finally contact them.
Remember that suppliers are your business partners. Aside from being credible, you should look for partners that are reliable and expert in their field. These qualities can help your business reach its goals.