How to find suppliers for a small retail business
Table of Contents
Suppliers are a crucial part of small retail business. Essentially, it can make or break your success. Choosing the right supplier sets you up for a thriving relationship that benefits you both. Alternatively, if you select suppliers that can’t fulfil your needs, it could lead to wasted money or time. We’ll offer some tips to ensure you are well-prepared to search for suppliers and simplify the process.
This guide discusses how to find suppliers for a retail business, including:
- Researching suppliers
- Vetting
- Communicating needs
- Ordering samples
- Negotiating with business
- Placing orders
Researching suppliers
The first stage of finding your suppliers is researching where to find them. From focusing on local businesses to extending your search overseas, there are a few ways you can find supply options..
To identify potential candidates, start by searching directories of suppliers and wholesalers available. It might be helpful to choose a few initial ones to help you find what’s right for you.
Some UK directories include:
Some overseas directories:
If you choose to use an overseas supplier, the costs to produce each product is often lower. Some countries like China, India, Pakistan and Malaysia pay lower wages to factory workers than the UK. Many British retail businesses choose these as ideal locations of suppliers.
If this approach goes against your business ethics, you may seek a supplier within the UK, though it’ll be more costly.
The term ‘sweatshops’ refers to foreign factories which could use practices like slave labour or the employment of children. When outsourcing production overseas you might not see what’s happening on the factory floor, so get caught up in controversy. Using British suppliers avoids that risk and also helps local economies while reducing the costs of shipping.
Vetting
Once you have selected a handful of suppliers, the next stage is to reach out to them. At the same time, many businesses also take the extra precaution of vetting companies.
Start emailing or calling people from each supplier on your shortlist. You can ask them questions about their company, get some quotes and find out information about them online.
Some helpful information to look for includes:
- Competency — have they worked with similar businesses to you in the past? You could contact the ones they have and ask about their experience.
- Capacity — are they going to be able to supply you with everything you need, and will they be able to meet increased demand if necessary?
- Cash — is the business likely to continue operating, or are there any financial problems they face? You don’t want to commit to an unstable company.
- Culture — how do they treat their workers? Are they engaging in any unethical practises? You don’t want a supplier that will cause your business controversy.
Communicating needs
After asking questions and investigating your shortlist, you can describe what you need from them. If they produce a product for you, give them designs, instructions or references. The supplier needs to be clear about what you want.
They may tell you how much each unit would cost and how long it can take them to produce. You can also find out if there will be any setup fees, which might be possible if they need to change their processes.
Ordering samples
Before committing to one supplier, you can order samples or prototypes from each to compare. With them side by side, you’ll see which matches the brief you gave and the quality you would receive. If you choose a supplier that creates a poor quality product, it could mean cheaper costs, but your customers may not be happy with it.
Suppliers in the UK are likely to understand the guidelines set out by the BSI (British Standards Institution). But if you are using an overseas supplier, it is your responsibility to ensure they provide the product customers expect. So when you are looking at samples, you can check these guidelines to see if your finished products would meet them.
BSI links to product guidelines:
- Kitemark certification — demonstrates quality and safety.
- CE marking — meets European standards, so you’ll have easier access to other markets in Europe.
Negotiating
Now that you have compared a few capable suppliers, you can negotiate with the chosen ones. If you still have any concerns, you may be able to ask for a lower price with the additional risk you take. For example, you received samples that aren’t up to your quality expectations, and you are negotiating based on the assurance they will be. In that case, you may be able to ask for a lower price overall.
For information on negotiations, see: How to Negotiate with a Supplier – with Sample Email
Ultimately, you don’t want to insult a supplier, but you also want the best deal possible for you. It’s common in business to see multiple offers on both sides, so ask for what you believe is fair. You may also seek assurance of the timeline and speak about how you are going to ship the products.
Placing order
By having a price you are happy with, you can order with that supplier. Having a good relationship with them from that point on might mean your business benefits in future. For example, suppose you have been with the company for a while. In that case, they may prioritise your work over others and offer you discounts.
To continue a build relationships and make sure everything runs smoothly, set up a decent line of communication. Whether through email, Zoom or over the phone, you must be able to address any problems quickly.
Manage your supply costs with Countingup
Taking on suppliers can put financial stresses on your retail business. These can include the time it takes to find and vet them, as well as the potential costs of ordering from the wrong ones. But when it does go right, you’ll likely seek to pay them on time. Failing to do so could lead to problems getting the supplies you need.
To ensure you can always manage your money, set up a business account with built-in accounting software from Countingup. The app can allow you to sort your costs using an expense categorisation feature that uses HMRC approved labels, which make taxes easier too. In addition, you can also receive regular cash flow insights, so you are always aware of the money coming in and out of your business.
Start your three-month free trial today.
Find out more here.
