selecting a supplier

What factors should be considered when selecting a supplier?

When selecting a supplier for your business, there are many factors you will want to consider that go beyond price and volume discounts. Many new businesses make the mistake of going with the cheapest supplier, which is not always the best option. Especially if that ends up costing you money in the long run when the product isn’t the quality you wanted and your customers are not happy. The money you have to spend to return or refund products can quickly add up.

When looking at potential suppliers there are several factors, including the cost that you should consider.

Determine your criteria when selecting a supplier

Before you find a supplier, it’s going to be helpful to know what you need. Make a list of what you are seeking from a potential supplier including:

  • Products you need
  • Quantity
  • Quality of products
  • Current and future availability of products
  • Delivery times
  • Price
  • Product labels

Once you have an idea of what you need, you can research what companies are out there that will offer you those products or services.

Do you want to import or source products domestically?

Both have pros and cons, and there is no “right” answer. It depends on your business, your products, and your customers.

Importing from major manufacturing markets like China will almost always be cheaper, and those suppliers are often in a position to carry more inventory so they can ship the product faster – although it can still take weeks to arrive once shipped. For drop shipping businesses, where you don’t physically hold inventory but you want to offer a lot of options for your customers, this is often the preferred option.

However, imported products aren’t always well received by customers for a myriad of reasons including labour conditions overseas, the perception of low quality, a preference to support local businesses, and so on.

Domestic suppliers can be great for small to medium businesses. Having a local supplier can allow you to develop a closer working relationship with them, making things like factory inspections, labour standard verification, and price negotiations much easier.

In addition, local shipping is much faster so while it may take a bit longer in handling time (the time between when the order is placed and when it is shipped), it may still reach your customers faster than something coming from overseas.

Quality of products

As mentioned above, it is tempting to go with the cheapest option, but you don’t want to do that at the expense of product quality. You want to make sure that the supplier you chose is going to supply you with a quality product. Where do they source their raw materials? Are they quality?

Don’t be afraid to ask questions about the quality of the products you are buying, and where your supplier is sourcing their materials form. It’s better to have all of the information so that you can make an informed decision.

Along with making a quality product, you also will want to ensure that they come labelled correctly and include all of the parts, pieces, and marketing materials.

Ask for product samples to make sure that you will be getting what you’ve asked for. If you are running a drop-shipping business you can use these samples to create your marketing campaigns.

Customer service

Quality customer service is key. Do your due diligence in ensuring that the company you choose will respond positively to your needs. How easy are they to contact? Do they have live support? When you call are they professional and friendly? If your supplier does not offer great customer service, don’t do it. It does not matter how great their goods and services are if dealing with them is a nightmare.

When you are looking at potential suppliers go over their terms and conditions carefully, you do not want to get hoodwinked by the fine print. If you want to offer easy and free shipping and returns, you don’t want to get mixed up with a company that doesn’t offer that.


When factoring in cost think in terms of the whole supply chain. From the point of origin to consumption. Where will the products be stored? Is there an additional cost for that? How will you deliver the product to your customers? What will it cost to ensure you have a reliable shipping method? Your potential profit can’t be calculated from the cost of the product vs. the price of the product. How much money can you invest upfront? A small business loan can help ensure you have the capital you need to get your business off the ground.

Cultural fit and aligned values

It may not occur to you to consider the values and goals of your supplier, but choosing one that aligns with your core values is as important as any other factor in making your sourcing decision. You don’t want to end up in a situation where your supplier is sourcing your products in ways that you would deem unethical.

How reliable are they?

One of the most important factors in your decision is the reliability of your supplier. You will want to look for companies that have a reliable shipping record and then you can connect with those that meet your criteria to determine if working together is a good fit. You can check out their company reviews, and if necessary consult with current customers about their performance.

Supplier certification is an essential component to ensure the integrity of your supply chain. You want your business to run like a well-oiled machine and a reliable supplier is imperative to make that happen. Once you have selected a supplier you will want to make sure that the reliability is always maintained by checking in with your supplier and your customers.

A large supplier may have better systems in place to manage your orders and provide stock, but a smaller supplier will be easier to form a relationship with – which can be extremely useful when you have urgent orders or contentious situations.

Finding the right supplier is crucial to ensuring you are able to deliver quality stock on time to your customers.

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