How to choose good suppliers for your business

Suppliers are among the issues that most disturb business owners’ sleep: how to choose the most suitable suppliers and how to maintain good relationships with them. If these issues are a concern for you, read on because in this article we will give you answers.

Your choice of suppliers will largely determine your inventory control (and the quality of your products) and, thus your ability to establish competitive prices so that your customers will continue to buy your products.

In both cases, you need to partner with the right suppliers in order to guarantee that you have the quantity of products needed to satisfy demand and that you will reach agreements that benefit both parties.

Learn more about these 2 topics with our recommended articles:

Now let's get down to business.

First of all: understand the types of suppliers

According to Espacio Food & Service, there are 4 types of suppliers:


These are companies that sell their products through representatives. Their prices are usually the lowest (as long as you buy in volume and the location does not raise shipping costs).


These are wholesale companies that buy from various manufacturers and then resell the products to retailers. In this case, they have the capacity to supply several products at the same time, which reduces shipping costs.


In most cases, they are small manufacturers or artisans who sell their products directly, without any intermediary. They usually offer exclusivity agreements on their products.


They work in much the same way as distributors, except that in this case their product portfolio comes from abroad.

Criteria for selecting a supplier (in addition to price)

While cost is obviously a key criterion, there are 4 aspects that you should take into account when choosing a supplier, according to Fundación Banigualdad:

  • Speed in complying with processes.
  • Efficiency in meeting the requirements that are indispensable to you.
  • Attention and support when you need it.
  • High-quality customer service and agreement fulfilment, as well as high-quality products.

We recommend that you always have more than one supplier for each product, so that you will always have a "plan b" in case something goes wrong.

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How can you improve your vendor relationships?

It's not enough that you know how to choose the best suppliers; you also need to maintain good relationships with them.

To do so, follow these tips:

  1. Close your agreements with a commercial contract between you, as recommended by the My Lawyers portal.
  2. Pay on the agreed dates.
  3. If you have a problem with paying on time, contact your supplier promptly to try to negotiate a solution, suggests the factoring company Logros Servicios Financieros.
  4. Respond in a timely manner to inquiries, emails or calls from your suppliers.

Get the most out of your supplier relationships.

As you can see, the secret to choosing a good supplier is to know what to expect from them, because there are differences in how you need to deal with a distributor, a manufacturer, an importer or a small producer.

Once you decide what type of partner you need, choose 2 or 3 that meet the criteria of cost, speed, attention, efficiency and quality. Finally, nurture the relationship with clear and transparent communication.

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