Vendors are one of the most essential parts of a successful venture. If the products that you are selling through your shop or e-shop are of good quality and procured at the right prices, you have a higher probability of making a profit and creating a loyal customer base than you do otherwise. Delivering this customer delight and earning profits is possible only when you have the right vendor. It’s important to make our selections carefully in terms of who is going to provide vendor services to us and for us.
Steps For Selecting A Perfect Vendor are-
#1 Examine Your Business Requirements
First, examine your business need then go for a vendor selection. Assemble a vendor selection and evaluation team who would be given the responsibility of finding a suitable vendor. Needs to accomplish is to define, the product, material, or service for which you are searching for a vendor. Discuss with your management and vendor selection team what your company wants to outsource. Ask your management team to analyze all the requirements and create a final document stating your business and vendor requirements.
#2 Search For Vendor
Search for vendors that will be able to deliver the material, product, or service. The larger the scope of the vendor selection process, the more vendors you should put on the table. Next, write a Request for Information (RFI) and send it to the selected vendors. Finally, evaluate their responses and select a small number of vendors that will make the “Short List”
#3 Potential Vendors
This is the most significant step to meet with potential vendors, discuss the following points in detail to ensure that they are the right fit for your business.
The quality of service/product is very important for any business. So, ensure that only those vendors known for quality are being considered.
Along with quality products/services, the vendor’s capability to deliver the product or service should also be considered and checked to ensure the smooth functioning of your business activities.
The cost at which you procure the service/product also impacts your final offer price and the bottom-line of your company. Conduct a cost-value analysis for the product or service.
Discuss the credit period that the vendor offers, and find out if they allow any flexibility in the payment terms and conditions. Check with them on how they require the payments to be made and if any interest or fine is charged on delayed payment, due to unavoidable reasons, of course.
While discussing all the above points with your vendor, you must also decide how, when, and in what frequency their performance will be monitored. This is also the time to discuss and put forth your requirements for reports.
#4 Evaluating the proposal & selecting the vendor
To begin with, conduct a preliminary review of all your vendors’ proposals. The next step would be to state your business requirements and the vendors’ requirements. Discuss with your management team and assign an important value for each requirement. Next, assign a performance value for each requirement. Now all you have to do is calculate a total performance score and choose the winning Indian vendor.
#5 Negotiate Terms and Conditions
Once you’ve started to work with them, meet with them to negotiate the terms and conditions of the contract and to ascertain that you and your vendor agree on all the critical aspects. A good vendor can help you create a good name for your brand and service in the market, whereas a bad and unreliable vendor can harm the brand and its positioning in the market. So, you must conduct thorough research before signing on the dotted line.