Dealing with Multiple Suppliers: Vendor Management
Utilizing multiple suppliers can often be a great and necessary step for your business. If you’re only carrying products from one supplier you give customers a limited choice of products. Using multiple suppliers can broaden the content of your business, and give your customers a larger price range and a greater selection. This increase in selection can be beneficial to your business, but using multiple suppliers does pose a few problems and can complicate your vendor management system.
Different suppliers will provide you with different products, price points, and even shipping costs. This can get confusing, and provide some problems for your business. For example, suppose a customer places an order with multiple products from multiple suppliers. Each individual vendor could charge a different shipping cost, so what would you charge the customer for shipping? There are a few ways to deal with this.
One way to manage multiple suppliers’ varying shipping costs would be to charge a flat shipping rate, by averaging out the rates of your vendors. Your shipping expense could end up being more or less on each order, but it should average out in the long run. There is also a growing trend of offering free shipping, and marking up products accordingly. You could calculate the average of your shipping costs per product, then simply add that to the product’s price and offer free shipping. Either one of these options would simplify the problem of multiple suppliers and their different shipping costs.
Another problem that arises with vendors is when they run out of stock. This problem is one that can be solved with multiple suppliers. If one of your vendors runs out of a certain item, another might still have it in stock so you can keep selling it. Also, if you are selling something from one vendor and it runs out of stock, another vendor might have a similar item that can take its place. If you only had one vendor, and they ran out of stock of a high-selling item, you could lose sales to a competitor that can supply a similar item from other vendors. Multiple suppliers can be a great tool for your business, as long as you figure out an efficient vendor management system.
For a great solution to managing multiple suppliers, be sure to check out the Bizelo eRetail Supply Management App and simplify your supply management system!