Are you planning to open a retail store in the coming months, or perhaps you already operate one but struggle to find the right stock? Either way, sourcing the best goods at the best price from reliable vendors is critical in running a retail store that generates the kind of sales and profits you need for long-term success.
One way to help yourself in this area is to ask potential suppliers plenty of questions so you get a good idea of how they’ll be to work with.
- What Are Your Payment Terms?
Firstly, you need to know what timeframes you’ll have to pay for the items you buy and whether the terms are upfront payments or within a fortnight or 30, 60, or 90 days, etc. Some suppliers have terms that enable clients to break up payments over a period, too.
Plus, find out if these payment terms are negotiable at all. You might arrange to have longer to pay for orders valued over a certain amount or if you give the supplier a particular number or transaction value orders per year. It’s worth checking to see if you can get a discount if you pay in advance or before due dates, too. The more you improve and manage procurement terms with suppliers, the better your business cash flow will be.
- Do You Offer Volume Rebates?
Another way to boost cash flow is to see if you can get sweeter deals on orders if you reach set purchasing goals. Many companies offer their customers incentives to get them to buy more. They may give discounts for extra transactions per period or if you hit pre-determined purchase amounts.
Even if you can’t get offers on the price of the goods, you may be able to negotiate for free or discounted shipping or get bonus items, or other value adds if you increase your volume.
- How Much Do You Charge for Shipping and How Long Does It Take?
Before placing orders with suppliers, find out what they charge for shipping. Don’t assume this element will be included or low cost, as many firms try to make more money by charging high delivery prices rather than just what it costs them. If the fees they mention seem unreasonable to you, look into rates you could arrange through your own shipping vendor.
Also, don’t forget to go now to the experts for getting quotes on the timeframe for deliveries. There’s no point buying from a supplier whose prices seem affordable if it means you won’t get stock for many months, especially during crucial trading periods such as Christmas or the end of the financial year.
- What Happens If Orders Arrive Late or Damaged?
Another thing to check regarding shipments and stock is what happens if orders continually arrive late. While it’s normal for some orders to get to you past expected due dates, and your suppliers may not have much control over some shipping delays, you need to know that the supplier has a track record of getting most products to clients in good time.
It’s worth asking for the percentage of their orders that arrive before given ETAs. Determine what kind of guarantees and discounts they can provide for shipments that don’t arrive when you need them.
- Will You Sell Direct to the Public?
If you’re a retailer or wholesaler, a crucial part of your marketing and sales strategies may revolve around providing goods to customers that are boutique and not found everywhere. You will also base your pricing around how prevalent stock is in the market. As such, it can be a real issue if your suppliers start selling wares directly to end-users and effectively cut you out of the picture and creating competition you can’t hold your own against due to price discrepancies.
Always ask manufacturers, distributors, and the like what their plans are in this regard and try to get a contract in place that ensures you’ll have at least some type of exclusivity, even if it’s just to sell in your suburb or region or on specific product lines.
Some other questions to ask potential suppliers include:
- What is your capacity, and how fast can you respond to changes in demand if we place much bigger or more frequent orders?
- Do you offer returns, and what are the conditions on these?
- Who will be my primary contact person at your firm, and what’s their approach to communication?
- Can you provide references from current and former clients?
- Under what circumstances might prices rise?
- What quality assurance processes do you have?
- What are your privacy policies and security practices?
- How ethically are your goods made?
Don’t be afraid to ask businesses all these types of questions. They’re going to be a critical partner in your organization’s operations, so you need to be sure you can count on them and trust them, not to mention afford their wares.
