Having a good relationship with your suppliers is essential when starting a business.
A supplier provides the groundwork for your start-up to expand and grow.
They are responsible for routinely delivering affordable, quality goods and materials so that you can create or offer your customers high-quality products aligned with your brand and reputation opens in new window.
If a supplier repeatedly falls short of your expectations, it can disrupt your business operations, creating problems with your ability to meet customer orders or provide high-quality goods and products, and could potentially harm your start-up’s reputation.
That can negatively impact sales, leading to lost revenue and less money available to invest and grow.
Regularly assessing your supplier’s quality, service, and communication can be a good idea so that if any problems arise, you can work to overcome them or find a new supplier if needed.
Read our guide on how to choose the best business supplier. opens in new window
Ten warning signs that you may need to switch supplier
If you’re wondering whether you need to change suppliers, some factors to take into consideration are:
1. A sudden rise in prices
If your current supplier isn’t transparent about their pricing strategy opens in new window and they increase their prices without providing reasonable justification – such as more than the rate of inflation opens in new window or due to supply constraints relating to shipping and raw materials – you could consider researching and comparing other suppliers.
Suppliers need to provide their customers with stability and certainty in pricing, as rapid, unexpected price increases can eat into profits opens in new window.
2. Delivery delays
Suppliers delivering too late or too early can negatively impact your ability to meet customer orders or increase your costs through additional warehousing requirements.
For example, if you own a small events business opens in new window and your delivery of party supplies arrives late, customers may be lost, and they may leave negative reviews, potentially harming future business.
Likewise, if you own a catering business opens in new window and a food delivery arrives too early, there could be insufficient storage for the early arrivals, causing the food or ingredients to spoil, potentially leading to wastage.
Read our guide to supply chain challenges and how to overcome them opens in new window.
3. Changes in market demand
If your current supplier doesn’t keep up with market trends, they could face challenges when dealing with shifting buyer expectations.
For example, if there is a sudden surge in demand for a specific product and your supplier doesn’t have the capacity or ability to meet demand quickly, your business could lack stock for an in-demand product.
New and innovative products are constantly being introduced into the market, too.
Suitable suppliers will be agile in adapting to innovations, such as new materials or products, allowing you to refresh your offering to customers and keep your business on trend.
4. Products, goods, and materials lack quality
If your supplier prioritises quantity over quality or has poor quality control, you could receive products, goods, or materials that aren’t up to the standard your customers expect.
Poor materials and goods mean your start-up might be unable to manufacture or create products to the required standard or incur costs when customers return defective products.
If your customers regularly complain about quality, it’s a strong indicator that you may need to consider switching suppliers.
5. Lack of consistency
Inconsistent service from suppliers opens in new window can cause you to lose confidence in their service, which could leave you worrying about whether your deliveries will be on time.
Consistency applies across all services from your supplier.
It can be a good idea to ensure that supplied goods, and materials are consistent in quality, that deliveries are consistent in frequency, and that communications are consistently of a high standard.
6. Invoicing or billing issues
If your start-up regularly receives incorrect invoices or billing information, that could be a signal that your supplier lacks organisation and efficiency.
Incorrect invoices will require your time to rectify, leading to less time available to you to operate your business.
7. Poor communication
If you find it difficult to contact your suppliers, this can be frustrating and affect your trust in their commitment to your business.
Check your supplier can respond when you need an answer.
Assess the different routes to contact your supplier – from online chat to telephone – and get an estimate of their average response time.
If they consistently fail to meet this and the lack of communication is negatively impacting your business, it could be time to look elsewhere.
8. Relationship breakdown
If you can’t communicate candidly and clearly with your supplier about any issues, it can be challenging to resolve issues, which could result in a complete breakdown in the relationship.
It’s typical for both suppliers and customers to seek to resolve disputes – such as delivering damaged goods – to both parties’ satisfaction and maintain a good working relationship.
Sometimes supplier issues happen.
If your supplier isn’t responsive or doesn’t take steps to rectify an issue that is their fault, that could be a sign that the relationship has broken down and you need to change supplier.
9. Your employees complain
If your employees alert you to issues with your suppliers, you may need to investigate further.
Your employees may flag up the poor quality of products and services, incomplete or inconsistent delivery, or other issues such as health and safety concerns.
It can be a good idea to collate a list of the concerns and work with your supplier to resolve them, or you may consider moving your business elsewhere.
Read our guide on creating a healthy work environment for employees opens in new window.
10. Better competition
If another supplier offers a more favourable deal, such as more innovative products, greater reliability and affordable prices, and better customer service, it may be worth considering switching suppliers.
In this case, always research potential new suppliers, checking customer reviews, service level agreements, credit terms opens in new window, and communications.
It may be worth talking to your existing supplier about your intention to switch to see if they can improve their offering to your start-up instead.
Where to find a new supplier
If you can identify with some of the issues above, you may want to re-think whether you’re getting the best service from your current supplier.
As a start-up, building and maintaining a good reputation to attract and retain customers is essential.
If you can’t meet your customer’s expectations due to a lack of materials, poor quality products, or inadequate customer service that is the fault of your supplier, your business may suffer as a result.
Writing a pros and cons list of your current supplier may be a good idea to see if issues can be identified and resolved with clear communication.
However, it may be time to consider switching suppliers if issues can’t be resolved.
Read our guide on how to choose the right supplier for your business. opens in new window
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Reference to any organisation, business and event on this page does not constitute an endorsement or recommendation from the British Business Bank or the UK Government. Whilst we make reasonable efforts to keep the information on this page up to date, we do not guarantee or warrant (implied or otherwise) that it is current, accurate or complete. The information is intended for general information purposes only and does not take into account your personal situation, nor does it constitute legal, financial, tax or other professional advice. You should always consider whether the information is applicable to your particular circumstances and, where appropriate, seek professional or specialist advice or support.
