How Do I Pick A Supplier?

- Nov 07, 2019-

How do I pick a supplier?

Thanks to resources such as Alibaba, it is pretty easy to come up with a long list of potential suppliers. But it is not so easy to take this long list and narrow it down to the right suppliers for your particular needs. So here is my strategy to help.

First, write down on paper what you think your ideal supplier would look like. For example, do they have access to a certain raw material, are they ISO-certified, are they verified suppliers, do they have X number of employees, do they produce X amount of goods per year and so on. The dream supplier will be different for every buyer so write down what is important for you.

Second, compare the website or brochures from your list of potential suppliers against the attributes of this "ideal supplier" and create three piles: "No way," "Maybe" and "Looks good."

Be very conservative as you decide to place a supplier in the "Looks good" versus "Maybe" pile. Generally speaking, the websites and brochures offer you a best case scenario in terms of capability and experience of the factory. Sales and marketing people anywhere in the world tend to overpromise and underdeliver.

For example, the website may say a supplier can produce 1,000 units an hour. That may be true in theory, but perhaps due to common power outages or required maintenance on equipment, they average only 700 units an hour.

If a supplier does not look great on the website, it probably will not look great in reality and you should put it in the "Maybe" or "No way" pile. Keep in mind, our goal is to narrow the large pool of potential suppliers down to a handful of qualified ones, so be strict and do not be afraid to fill up the "No way" and "Maybe" piles.

Note that we have not yet contacted the suppliers to ask about price. Do not do that just yet, because as soon as you do, you will subconsciously be attracted to the supplier that has what appears to be the best price, and it is very rare that the lowest price supplier also has the quality or lead time or other attributes your "dream supplier" would have. It is far more effective to narrow down the pool to a handful of highly qualified suppliers, then start to talk price.

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