Having suppliers for your business is a great way to diversify revenue. But knowing which suppliers to use can be difficult. Here’s a quick guide!
by Troop Atomic Mommy
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When it comes to ordering supplies for your business, it’s important to consider which type of suppliers that you buy from. Some suppliers will focus on providing a small amount of very niche items. Others will supply a huge range of items, potentially even targeting multiple industries. Each type of supplier has its benefits, and in this guide, we’ll go over the differences between specialist suppliers and general suppliers, and when to use each.
Types of Suppliers
There are two kinds of suppliers: specialist and general. A specialist supplier helps businesses with their specialized skills in supply management. A general supplier handles the broader picture of the supply operation, whereas a specialist can have focused skills that could take your business to the next level. Choosing which to use for your business can be a tad confusing, so we’ve laid out a few scenarios to figure out which suppliers to use for your business.
Choose a Specialist for Hard-to-Find Items
There are some products you’re only going to find from certain suppliers. For example, a general mechanical parts supplier is unlikely to sell airplane parts. If you need to find parts for aircrafts, you’re better off choosing a specialized supplier like Alpha Aviation Partners. There may also be times when you need to go even more niche. For example, if you were looking for custom silicone baking trays, you would find a supplier specific to those needs. In some cases, a custom manufacturer may be your only option.
Go General for More Basic Items
General suppliers are more likely to focus on the basics. For example, if you own a restaurant, using a general food wholesaler like Sysco could give you access to all the general ingredients you need. If you’re looking to order general cuts of meat like beef, lamb, chicken and pork, they could be a good option. However, a general supplier may not be such a good option for more exotic meats or prize cuts of meat. In other words, you wouldn’t choose a general supplier of meat if you’re looking for horse or bison meat.
Go Specialist If You Want to Deliver a Premium Product/Service
Companies aimed at a high end audience such as five star hotels or luxury clothing companies may not want to opt for basic supplies. To provide a premium service, it may be important that you spend extra on premium supplies, which could mean having to use a more specialist supplier. For example, if you’re a hotel that wants to go above and beyond to provide comfort to guests, you may not want to buy all your hotel supplies from one company – instead it could benefit you to approach specialist companies for the best mattresses, the best air conditioning systems and the best technologically advanced shower systems that money can buy.
Go General If You Want to Save Money
While general suppliers tend to offer more basic supplies, they also tend to offer cheaper supplies. Many of these companies are much larger and as such, can afford to set lower prices. General wholesalers also typically allow you to buy in bulk at discount prices, which you may not always be able to do via a specialist retailer. Choose these companies if you’re on a tight budget.
Go Specialist If You Have the Time to Manage Multiple Suppliers
By choosing to buy your supplies from specialists, it typically means having to order supplies from lots of different companies. The logistics can be a lot more complicated – you could spend a lot more time having to order from each one individually, which means keeping track of multiple delivery dates. Plus, accounting will be a lot more complex as there will be much more individual expenses going out. Make sure that you have the time and patience to deal with this – you may even find it beneficial to hire someone specifically to the role of managing suppliers.
Go General If You Want to Streamline Your Supply Chain
Using general suppliers can help to streamline your supply chain. In some cases, you may even be able to order all your supplies from one company. This means less individual expenses to manage, plus you can get all your supplies delivered at once. Keep in mind that even though this can streamline your supply chain, it can also become a hinderance should there be any shipping delays.
The Takeaway
Having suppliers for your business is a great way to broaden the products you offer, thereby enhancing your revenue stream. This also means that you’ll gain the ability to diversify your revenue, and as a result, stabilizing your business.