So many small businesses overlook the importance of their supply chain. Sure, they know where their products come from and the approximate lead-time for receiving orders, but here are 3 questions all small businesses should be asking.
1. How are you relations with your suppliers?
An effective way to better your relationship with the people who send your products and supplies, is to engage them. Pick up the phone the next time you get a big order and just say “Thank You.” It goes a long way, and they will remember you for future orders. I was able to secure a demo-product from a computer component supplier two months before it was to get to market just because I spent the extra few minutes to speak with the dealer every now-and-then.
2. Can you organise a discount with any of them?
There is always a bit of room for pinch in the prices suppliers list, and there is no shame asking. Especially if you’ve been buying from that particular distributor for a long period of time. Most will offer bulk discount pricing. Or if they using credit invoicing, maybe you can offer guaranteed 7-day or less payment-in-full for all orders in exchange for a 3% discount. It saves them chasing accounts and can help you increase the profitability of your sales.
3. Do you have a backup plan in case of temporary or permanent supply failure?
Supply companies fail. You need to have a plan in place in the event of temporary or permanent closure. Some small businesses can survive by buying ahead an extra month’s worth of supplies in case of a hiccup. Having a local supplier can be a great choice. Even if the products aren’t quite as cheap as your standard supplier, being in-stock is critical for your customers. They expect it. One of our businesses has a supplier that ships us 85% of our merchandise, and a second, slightly more expensive dealer, that we call on occasion. In the event of emergency we can call supplier #2 and make the move accordingly.
If you can answer positively to all of these questions, you are well on your way to happy supply chain management and better profits and less stress.