All about Supplier Sourcing

 

A company cannot do without sourcing in order to achieve its objectives. Even the search for partners like suppliers goes through sourcing to be more efficient. But what is sourcing?

Discover through this guide everything you need to know about supplier sourcing.

Sourcing: definition

Sourcing can be translated as finding a source. In the professionalization of an online business company, there are several sources including suppliers. These can be suppliers of products, tools, services, etc. Supplier sourcing is therefore the search for suppliers. But in practice, supplier sourcing is more complex.

It is a question of researching, evaluating purchasing and logistics, and also comparing possible partners in order to find the best suppliers. Supplier sourcing brings considerable advantages in the economic context, but also in the technical context. It is therefore a strategy, a step, that inter-companies must not neglect.

Supplier Sourcing Objective

The objectives of supplier sourcing are numerous. There is the improvement or optimization of margins and therefore the turnover of large companies. Sourcing makes it possible to find a supplier that offers internal cost reduction, advantageous rates and an impeccable purchasing process. This makes it possible to increase margins, since the selling price does not change, but the supply tariff decreases.

Supplier sourcing also makes it possible to diversify the number of partners. The company will be able to find several potential and advantageous suppliers during its search. Thus, it will not be dependent on a single partner. Note that dependence can lead to the cessation of the company's activity. What for?

Because if the supplier closes their store, the company will have to pause their activities until they find a new partner. This will impact the needs of the company. Thanks to sourcing, the company's business will always be able to ensure its production since it will have other sources in hand.

By the way, check out our complete guide to successful selling on eBay. This article offers you 18 strategic tips for generating revenue.

Carrying out a Supplier Sourcing: the steps to follow

To do supplier sourcing, there are a few steps to follow. The first is the most obvious: the search for potential suppliers that offers an effective purchasing strategy.

The search for potential suppliers

In order to complete this step correctly, you need to set the geographic area for your search. Note that the more distance there is between your company and the supplier, the higher the overall purchase prices of supplies will be. This also impacts the delivery time (see AliExpress: Complete Guide).

Once you've defined the geographic area, you need to target potential suppliers who offer responsible purchasing. They are the ones that are best suited to meet your needs and those of your business. But first, determine the selection criteria that you will use to target the right suppliers and who have an efficient supply chain. There are several.

There are prices of production purchases and industrial purchases, industrial competence, responsiveness, quality, service offers, supply management, etc. Once done, perform a constant standby. This will allow you to list the suppliers that meet your expectations and needs.

To find your potential suppliers (dropshipping for example), you can source by your own means through the internet for example. It is also possible to find your partner suppliers through specialized sites. You can also leave the search for potential suppliers to a consultant.

Otherwise, it is also possible to draw up your supplier inventory by soliciting a professional network for recommendations. You can also search for your suppliers through professional associations, or otherwise various directories and directories.

Getting in touch

Once you have your list of potential suppliers and already analyze the management control on the procurement function, contact them by sending a request for tenders. To be able to work with the right suppliers in e-commerce (find out how to find), you need a promise of partnership during exchanges. This promise must be beneficial for both parties, because know that you must also convince the right suppliers to work with you.

Before contacting strategic suppliers, you must therefore determine your needs. By exposing them to your future partners, they will be able to study the profitability of the partnership with you and agree or not to work with you. You need to determine in advance what kind of products you need, volume, number, price, logistics up to delivery.

The greater your needs, the more interesting the partnership will be for the supplier. He will be more inclined to accept the partnership, but also to accept some of your conditions such as price negotiation for example.

Check the reliability of potential suppliers

Before starting the partnership, check the reliability and performance of the suppliers. You can check customer reviews. You can also look at the financial information about suppliers to see if they all have good cash flow and to see if they are creditworthy. For your reliability analysis, you can also perform an audit on their responsiveness and availability.

See if you can reach them easily and if they are able to solve the problems that fall within their scope. Also check the various certifications obtained by your potential partners. ISO certifications, for example, offer an excellent insight into the quality, seriousness and professionalism of a panel of suppliers.

To go further, test your dropshipping suppliers by making a small order or strategic purchases. This test will allow you to get a precise idea of how your potential sources work as well as the quality, the price at the purchasing level, the delivery time and others.

Compare and start a lasting relationship

After these steps, you need to compare the providers and choose the ones that offer the most benefits. Once you have selected your end partners, start a lasting supplier relationship with them. For supplier relationships to be sustainable, both parties, i.e. you and your suppliers, must respect the commitments and ensure the continuity of the benefits offered.

For example, if your supplier wholesalers offer attractive prices, they will have to commit to maintaining them or even lowering them in the near future. If you have offered this or that volume, you must be able to maintain this offer or even increase it so that your selection of suppliers can make profits on their side. It is important to put in place a long-term partnership promise to promote sustainable procurement.

Supplier sourcing includes steps that sometimes take time. Nevertheless, its importance is undeniable. If, however, you do not have time to do a good sourcing, know that you can use software, tools or even an agency.

This will save you time and the result will be optimal. The search for potential suppliers will perfectly meet your needs. Comparison and selection will be relevant. If you use tools or software, all you have to do is contact the suppliers.

In case you go through an agency, there are some that propose the call for tenders as well as the contact in addition to the main steps of supplier sourcing.