Finding Suppliers for Your New Business

Finding Suppliers for Your New Business

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It is not unusual for startups to hit a brick wall when it comes to finding suppliers. This is a basic problem for most businesses. Very few businesses started and are still using the same suppliers they have now. Looking for and working with suppliers is a slow-moving process. Think of it as finding a life partner. When you want to settle down, you don’t go out and expect to find someone in the public park. It takes months and years of constant communication to find a partner who will stick with you through thick and thin.

That’s the same process you have to go through when you want to find a supplier for your business. It’s not easy, but you have to take the steps carefully. You have to know what you’re searching for. And lastly, you have to accept that sometimes, basic instinct will play a huge role in choosing the one you want to work with.

Know What You Are Looking For

There are three common types of suppliers. First is the manufacturer, which produces your own idea. A good example is a company called Lakeside that’s into manufacturing different equipment and tools for the hospitality, food, and medical industries.

The second type of supplier is called, well, the supplier. This one already has an existing product. Your goal is to buy their products in bulk and sell them for a profit. The third is the dropshipper, which already has existing brands that they will ship under your name. With dropshipping, you don’t need storage or a warehouse for the inventory.

Choose Between Domestic and International

You can source your products either from domestic or overseas suppliers. Domestic suppliers have a lot of advantages, such as faster shipping time and easily verifiable credentials. They also provide greater payment security and faster turnaround time. However, they also have higher labor costs and fewer product choices because many items cannot be manufactured in your home country.

On the other hand, overseas suppliers have lower costs and more options. They’re usually from Asian countries like China, Taiwan, and India, where labor costs are much lower. Of course, when you source supplies overseas, shipping them will take longer compared to your domestically-sourced supplies.

Search Through Traditional and Online Means

You can find most suppliers in online directories, search engines, and through referrals. A simple Google search will yield several results—from domestic to overseas suppliers. You can check out their business profiles on places like Alibaba. There are reviews, recommendations, and ratings there that will help you choose the most reputable supplier for your new business.

Of course, asking for referrals from industry experts is also a great way to land a supplier who knows what you need. You can also look for referrals in online communities. There are plenty of these on social media.

machinery at a factory

Request for a Quote

The biggest question you need to ask is “how much?”. But before asking for the price list, you need to know other things, too. Ask the minimum order quantity, sample pricing, production pricing, turnaround time, and payment terms. Knowing these details will give you an overview of what you need to provide and how much you might have to pay for the products and services your business demands.

Negotiate the Contract

As a first-time buyer, you will be shocked that some manufacturers can only supply you if you order about a thousand of the same items. Don’t fret because this is negotiable. You might need to pay a higher price per unit if you go below the minimum order quantity, but that’s better than having an excessive quantity of products in your storage room.

Review the Contract

Before you write the check, the supplier will ask you to sign a contract. This binds both of you to the terms and conditions, so make sure those are clear. Read the tiniest detail in the contract. If something doesn’t seem right to you, talk with a lawyer about it. If you’re dealing with an overseas supplier, make sure that the terms you agree to are as binding to them as they are to you.

It sounds daunting to look for a supplier. There are many processes that you have to go through. The trick is to be patient and persevere. Do not settle for a supplier unless you are sure that they can produce the items your business needs and that they’re a reputable and legitimate company with credentials to back it up.

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