Building a strong supply chain to secure products and materials for your business is an essential component of running a successful company. Great communication and a strong partnership can lead to more growth opportunities in the future for both you and the supplier. However, simply working with one supplier for a product can sometimes have disastrous consequences.
For example, what if that supplier suddenly runs out of a specific product or material? Or what if they’ve sold most of their remaining stock to older customers, leaving you and your business to seek other sources? Or what if unfortunate circumstances fall upon the supplier, giving them only two weeks to secure enough funding before they have to liquidate?
These circumstances aren’t uncommon. Business relationships can be extremely volatile at times, but this is only partially why you need to secure multiple suppliers for every product that you need. Here are a couple more reasons why you should start reaching out to more vendors.
Strengthening your supply chain and spreading it further
Your supply chain probably covers enough so that you can comfortably operate your business in your local area. But what if you want to expand a little? What if you want to move to a neighboring state as well, or perhaps you want to establish another location on the opposite side of the city? By looking for multiple suppliers, you can strengthen your entire supply chain and ensure that you can provide your products and services to customers everywhere.
However, do keep in mind that your supply chain can become a logistical nightmare when you have to juggle several different vendors and suppliers. So in order to get around this, make sure you have an experienced logistics manager to help you orchestrate a large project like this.
Combats fluctuating prices and ensure you always get the best deal
It’s not uncommon for suppliers to have volatile prices, especially if the market for those materials and products is constantly evolving. For instance, propane is needed in a lot of different industries. Its price can fluctuate wildly based on various conditions and factors in the country and across the entire globe.
In order to counteract these fluctuating prices, you have to consider working with multiple suppliers to ensure that you always have access to different prices. This helps prevent price gouging and ensures that you can deliver your products and services at a consistent cost, thus protecting your customers as well.
Another benefit to working with multiple suppliers is that it helps you get the best deal because you can negotiate prices. When a vendor knows that they have fierce competition in the area, they’re more likely to lower their prices or suggest unique deals that are personalized for your needs. This is a fantastic way to get the most out of your relationship with a supplier and helps you save a lot of money in the long run, especially if you can show that you’re able to provide a constant stream of revenue as a long-term customer.
