How to choose the best business supplier

Suppliers form the foundation of your business.

Even if you're a sole trader, you'll need to source materials – from office stationery and a mobile phone contract, to raw materials that you'll use to make your products.

Making sure that you choose the best business supplier and have safeguards in place to minimise problems should they let you down, will help protect your business.

Suppliers fall into four camps: distributors, manufacturers, specialists and import sources.

Distributors act as a bridge between manufacturers and businesses, handling lower quantities orders than a business would need to place directly with a manufacturer.

Specialists offer bespoke and unique goods, while import sources supply goods from overseas for resale in a local market.

Most small businesses will deal with distributors – whether an IT equipment distributor or a reseller of materials that you use in the operation of your business.

How to find the best supplier

Draw up a list of potential suppliers – search the internet for examples of companies that supply what you're looking for.

Check their credentials and clients – some suppliers list the businesses that they supply.

Look for online reviews of the supplier, and use search terms such as ‘supplier name problems' to get an insight into how they treat customers.

Contact some of your shortlisted suppliers to see how responsive and helpful they are – all signs of good customer service. An unresponsive supplier should sound alarm bells.

Supplier price and location

For any small business, supplier pricing is important especially if funding is tight.

Call shortlisted suppliers to get and then compare quotes.

Narrow the list to two or three suppliers and contact each, explaining your new venture and that you're looking for a longer term partnership – it can be useful to see which supplier is willing to lower prices in the short term to help your business.

Supplier location matters, too. Suppliers closer to your business can mean lower shipping costs.

Check delivery times and delivery schedules – how often and how quickly orders can be delivered.

Check supplier flexibility for adjusting orders and the notice needed, and how are products shipped.

Make sure you negotiate free delivery if you're placing sizable and regular orders.

Choosing the most stable supplier

While price is important, it shouldn't be the only reason to use a particular supplier.

Many businesses are exposed to financial problems as a result of supplier failure – especially if that supplier is critical to the operation of the business.

Supplier stability is more important in the long term, so look for one that's been in business for several years and has a good reputation.

Check how long their management team has been in place – a more established management team shows greater stability.

Find the most reliable supplier

After price and stability, supplier reliability will directly impact your business.

Late or lost delivers, poorly packaged goods and inconsistent communication can mean you spend more time chasing up a lacklustre supplier than actually running your business.

Speak to other customers – ask the supplier for references – and place a few, smaller orders to see how delivery works.

Generally, larger suppliers have better and more robust distribution networks and the capacity to handle problems – such as snow and wintry roads – so you continue to get your supplies.

However, small suppliers will spend more time on your business if you're one of their biggest clients – resulting in better deals and more attention.