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How do you know you'll be getting the best possible prices from the right suppliers?
That’s just the first of many questions you’ll have to ask as you shop around trying to find the best vendors to suit your needs. Our supplier audit checklist of questions can help you!
Below, you can find some answers. It starts by setting aside a few hours to do some research and ask yourself these 7 key supplier evaluation questions from our supplier audit checklist:
- Which traits are most important to my business?
- Which suppliers offer more of what we want?
- Do other field service businesses recommend these suppliers?
- Do the suppliers offer trade accounts?
- Are the products actually less expensive with the trade discount?
- For a brick-and-mortar merchant, are they willing to match internet prices?
- What does my gut say?
As a small or medium-sized field service business, you probably don't have manufacturer representatives banging down your doors. You're more likely to be purchasing parts and supplies as you need them from online or visiting brick-and-mortar retailers like Wolseley, Plumbcenter, or Screwfix.
Your first instinct might be to choose the closest supplier to where you operate and be done with it, or to select the one you've heard has the lowest prices.
True, it’s not a bad way to simplify your parts purchasing process—but it’s also true that it can lead to overspending, wasted time, irritated customers, and even lower your profits.
So, how do you prevent that? Let's take a look:
1. Which traits are most important to my business?
A high-quality service that’s also delivered quickly is not easy to provide. In an ideal world, all your customers would be patient, let you do good work, and always pay a fair price. In reality, it’s more like the old saying: "Good, fast, cheap—pick two!"
This well-worn project management adage is also known as the 'Triple Constraint'. If a service is good and fast, it won't be cheap; if it's cheap and fast, it likely won't be good; and if it's cheap and good, it definitely won't be fast.
Getting the right parts can let you work efficiently and that’s why finding the right supplier who meets your needs is so important. While you probably won't get everything you’ll want from a single supplier, if you prioritise the traits that are most important to you, you’ll be able to see improvements in no time.
Below, we’ve listed eight common supplier evaluation traits for you to consider, and they come recommended by The Next Level Purchasing Association. You can consider which of these traits most appeals to your business when thinking about prioritising your choice of supplier/s, tick them off on your own supplier audit checklist:
- Quality & Safety
- Social Responsibility
By deciding on the traits most relevant to your business, it can give you a better idea of how the suppliers you work with can positively impact your ability to provide remarkable customer service and more easily deliver great work, as a result.
Before beginning your search for a supplier, think about which of these traits is most important to your business, and which are the least. You may have some criteria of your own, as well. Add them to the list and start ranking and as you visit suppliers and make assessments.
In the end, you’ll be in a better place to ensure you’ve found the one that suits you best.
📚 Further reading:
What's better—buying parts only when you need them, or stocking in advance?
Click to read 5 suggestions to help you better manage your stock. 📦
2. Which suppliers offer more of what we want?
Now it's time to create a list of the suppliers you want to evaluate based on the criteria you just chose. A Google search for online suppliers and brick-and-mortar retailers in your area will turn up a lot of options. There may be the usual big-name suspects, but don’t discount other, smaller retailers either.
After all, there’s no reason you can’t purchase parts at multiple locations, but the benefit to choosing a preferred supplier as the result of your audit is that they’re more likely to offer extra help, favours, and discounts if you're a frequent purchaser and loyal customer.
Once you have your list, visit the retailers' websites to compare how well they fulfill your most important criteria. For example, if the price is your main consideration, compare how much the same parts cost at multiple locations. If it's the speed of delivery, check out what delivery options they have, and how much they charge for each one.
3. Do other field service businesses recommend these suppliers?
It never hurts to learn from your peers and it can dramatically inform your supplier audit, giving your checklist a lot more weight as you take onboard feedback and insights from others.
You check out reviews when choosing a restaurant, looking for a new car, or even deciding what takeaway to order online. Customers will do the same, searching reviews for your business, so why not let user reviews guide you to a fantastic parts supplier as well?
Trade associations, the trade press, and online forums like UKPlumbersForums are all good places to find opinions and experiences from your top candidates' actual customers. You can even reach out on Facebook Groups, LinkedIn Groups, and email other businesses, all to ask what experiences people have had with a particular supplier.
4. Do the suppliers offer trade accounts?
Many parts retailers offer trade accounts that come with perks like discounted prices. Cheaper (but still high-quality) parts can mean more profit for you, so be sure to search around for deals and consider their impact as you put together your supplier audit checklist.
However, here’s some food for thought: tempting though it can be to put “cost” at the top of your list of criteria, we’ve talked before about how pricing shouldn’t be a race to the bottom, and if you’re able to get good materials supplied within a reasonable time-frame that doesn’t cost you the earth, you’ll be in a strong position to provide quality work for your customers that still helps you turn a profit.
The impact of this will only be made stronger if you can properly communicate that high-quality work is maintained by quality materials. This means you can focus more on providing great customer service. What customer won’t be enticed by that?
5. Are the products actually less expensive with the trade discount?
Buyer beware: Just because a supplier offers a trade discount doesn't mean they're your most cost-effective option. It’s thorough research that really informs your supplier audit, not promises, so don’t be fooled!
Some field service businesses complain online that certain suppliers raise their prices so they can then offer 'discounts', so the net effect for you is null.
In other cases, a supplier may simply have higher prices in general, so the trade discount doesn't make the prices cheaper than their competitors.
6. For a brick-and-mortar merchant, are they willing to match internet prices?
If you want to support your local parts supply retailer but don't want to pay a premium for the privilege, find out if they'll match the prices you find online.
At the end of the day, suppliers will want to make a sale as much as you want to get a fair price for a product, but as they say: “If you don’t ask, you don’t get!” And at the very least, you might find that your local shop is able to match prices (or get close), all while offering you a level of convenience that’s worth the price.
Price comparisons and finding the best deals are becoming increasingly common and, again, whilst it shouldn’t be a fight to the bottom, there’s no reason why a bit of negotiation can’t work out well for everyone involved.
This goes back to what we mentioned above: If you convince the supplier you'll be a loyal, frequent customer, they may agree to price-match for you.
7. What does my gut say?
Once you've gathered data on how the suppliers match your top criteria, it's time to choose the big winner. If you have two or three close contenders, sometimes it comes down to your gut instinct.
While many business owners scoff at the idea of using instinct to make decisions, experts say intuition should have a place in your decision-making toolbox.
"Leaders gather data and seek input but at some point, they reach the over-thinking tipping point," says Shelley Row, MBA, author of Think Less Live More: Lessons from a Recovering Over-Thinker, in an article on Forbes.com. "That’s the point where the time needed to gather more data and input exceeds the value. They must decide and move on."
The Takeaway: Stock Control is the answer.
As ever, it's important to carefully select the dealers you purchase parts from: that’s why a supplier audit is so handy, for old and new businesses alike!
After all, if their parts are too expensive or their delivery is slow, this can negatively impact your company, resulting in lost profits, impact first-time fix rates, and lead to poor customer journeys.
We’re not saying to dwell on it forever, but whether you feel like you’re over-thinking your parts management, or perhaps not giving it enough time, the points above can help you get a better handle on your stock.
Download ⬇️: Are you ready for stock control?
Download ⬇️: 7 Things to Look For in Stock Control Software
If you’re interested in taking things even further, you should know that Commusoft can help you manage and track parts, take care of invoicing customers, as well as manage purchase orders—and so much more.
On that point in particular we’d encourage you to investigate Commusoft’s automated supplier invoice import capabilities and learn all about how we’ve taken great steps to streamline the tedium that can so often come with invoicing, even in a digital world!