You’ve developed a product. So how do you find a cost-effective and reliable supplier? Globalization means the world is your supply oyster–but how do you actually find the best supplier for your product?
Here are some tips from Josh Green, the CEO of Panjiva, a global trade intelligence platform used by over 1 million people a month (and 40 Fortune 500 companies.) Their Global Search tool uses data from government agencies, trade organizations, credit and financial firms, as well as user feedback to help buyers find the best suppliers for their individual needs.
1. Understand the world is available: And it’s also available to your competitors. If you don’t understand the full range of options, that’s a problem–because your competitors will. Keep in mind the right answer may still be right in your backyard. But to stay competitive, you need to know that’s the case.
2. The data is available, too: Data is the great leveler. In the past the people able to find the best suppliers were the people who had the relationships: They knew someone who knew someone. Now there is a tremendous amount of data available; that’s a democratizing force because it enables a start-up to find a great supplier even if they don’t have the right relationships.
3. Don’t underestimate the importance of relationships: Relationships are no less important. If you plan to place a big order with a company you need to be sure you can trust the person responsible for delivering the order. Relationships are absolutely crucial to establishing trust. Many people get seduced by the availability of data and just use data to make a decision. Data is a great starting point if you don’t have relationships, but once you use data to create out your short list, you still must visit and build relationships if you really want to have confidence you will actually receive what you need.
4. Start small: How do you build a relationship? One step at a time: Place a small order and make sure you’re happy with the initial results. Then ramp up.
5. Trust your instincts: Yes, you’re out of your element. Yes, there are different ways of doing business around the world. But if something doesn’t feel right, it’s probably not culture. Something probably feels “off” because it is off.
6. Understand you’re selling to suppliers, too: Walk in a store and you expect someone to run over and say, “How can I help you?” They fight for your business. It’s not the same experience when you go to find a supplier. You will interact with people who are not simply fighting for your business; they’re trying to determine who is worth betting on. A supplier doing business with someone in another country is taking the same risk a buyer takes. If the supplier ships and doesn’t get paid, they have little or no recourse. If they invest time and energy and your business fails, they’ve wasted a lot of resources.
When you walk in their door, walk in with a critical eye, but also be prepared to show you are a credible business partner.
7. And remember it takes time: There are ways to structure the financial piece of the transaction to minimize risk with instruments like a letter of credit, but in truth there is still tremendous risk when you do business across borders. Choosing wisely is key. It will take time. When you start a business you usually get things wrong a few times before you get them right. The same is true for finding a great supplier. Be patient, be determined, and be persistent. The reward is worth the effort.
Source: Josh Green of Panjiva at Inc.com
Panjiva is a member of BIIA