By Brian McKay
Sourcing products for your business is often one of the hardest hurdles you ever have to jump. With all the “get-rich-quick” schemes and books out there, there’s a lot of misinformation floating around. If you believe enough of it, it can screw up your supply chain worse than you’d ever want to imagine. In this post, we’ll look at some of the costliest sourcing mistakes any CEO can make. Avoid these, and dealing with sourcing issues will become a thing of the past.
Image source: Wikimedia
One big mistake is forgetting that you get what you pay for. Like most of us, you’ve probably heard all about the benefits of sourcing from China and other countries in the far east. While western suppliers will often be very firm in their pricing and hard to negotiate with, Chinese suppliers will always give you a lower price if they can afford it. The thing that may be lost in translation is that the lower you pay, the poorer the goods are going to be. As low as the prices may be, don’t jump straight to the cheapest suppliers. Reach out to a supplier, and make sure they know from the start that you’re willing to pay more for a higher quality product.
Image source: Wikimedia
Another big mistake is overworking small suppliers. You’ve probably heard that your first, smaller orders will be all fine, but as you begin to make larger and larger orders the quality can be depleted. You may be able to get some fantastic deals from smaller suppliers. However, it’s important to consider the size and experience of the operation. Ask for all the details on their manufacturing facilities, and use these to judge how much you’ll be able to push the supplier. There’s nothing wrong with a small supplier provided that they can grow along with you, and stay on top of the orders you need to keep your business running. Whether it’s bespoke, specialised parts or uniform components like hydraulic fittings, make sure that you’re not going to be in a position where your orders are overworking the supplier. When it gets to this point, both businesses will suffer unnecessarily.
Image source: Pixabay
Finally, don’t forget how valuable time is in supplier relationships. That old maxim “time is money” is true in so many ways. Developing products, sourcing them, shipping them, and everything else you need to do in a supply chain all requires time. When you’re in the sourcing phase, be sure to ask your suppliers about the time it takes to finalise and send orders. Don’t settle for a rough estimate here; really grill them for information. The aim is to get an accurate figure on the time it takes to launch a product. Once you have this figure, it will help you hit the peak of the product lifecycle right on the nose. Then, all you have to do is sit back and enjoy the massive demand!
If you’re about to go looking for suppliers, stay aware of these three mistakes, and ster well clear of them!
Brian McKay is a co-founder of zenruption. He has a B.A. in Political Science from Gonzaga University and an M.B.A. from Boise State University (yes that blue field). His goal in life is to look out for the regular guy and bring as much knowledge and change to this world as he can. His purpose in founding Zenruption was to do just that and help craft the world he wants his daughter to inherit. Please feel free to email him any feedback or article ideas at firstname.lastname@example.org. On twitter: @brianmckay71
On Facebook: https://www.facebook.com/briguy71