In this article, we sit down with Mpumi and Zola (TPFs best on supplier relationship management), and ask them to give us a few tips on how to build and manage your relationship with suppliers 

We ask them 9 questions, in which they impart a little bit of the wisdom that they’ve obtained over the years, in this brief but insightful article.

1. What qualities make a good supplier?

Mpumi says:

“Their ability to deliver on time is crucial for your business. Make sure that they have VAT registration, a clear (coherent) website, and can be reached whenever you call their phone.”

Zola says:

• A Good communicator
• Reliability when it comes to production
• Reliable provision of quality.
• Someone who understands their buyer, and makes it easier to sell whatever it is they supply according to your needs.

2. What makes a bad supplier?

Mpumi says:

“Any deviation from the first point.”

Zola says:

“Someone who isn’t able to communicate effectively with their clients. Production capability as well, for instance: you take on a job and lie about being able to deliver, or take on a (big) job and you don’t communicate whenever you come across some problems. And poor customer service.” 

3. How important is a supplier in the tendering process?

Mpumi says:

“Extremely important as they use the supplier prices to bid for tenders, once the tender has been awarded, the supplier needs to have the same pricing, if they are unstable on pricing, it chows the profits”

Zola says:

“Very important, suppliers need to deliver quality production/goods/services to the best of their abilities. Their communication must be effective so that there aren’t delays to the project.”

4. What does it take to establish a good relationship with a supplier?

Mpumi says:

“Previous dealings with the supplier are key (once you find a good one, your loyalty goes a long way). Once we pay on time and they deliver on time, a connection is made and we are best buddies.”

Zola says:

• Good communication.
• You as a client must be loyal to your supplier so you’re able to form a great working relationship and bond 
• Give honest feedback to your supplier after every project so that they know the things they need to work on. It will improve your experience with them in future. 
• The more you bring your supplier business, the more discounts you are guaranteed, or even credit so you’re able to buy things from them quicker without having to raise capital. 

5. Where do you find the most reliable suppliers?

Mpumi says:

“From the projects that we (TPF) have successfully funded before, and word of mouth.”

Zola says:

“For me, mostly referrals but I also Google suppliers, for some I check out their ratings on the internet before I use them.”

6. How do you vet suppliers?

Mpumi says:

“First check their website, contact details, status of registration on CIPC, VAT registration and then call them. If you can, visit their offices and confirm that they do exist as they say they do.”

Zola says:

·  Google (to start)

·  CIPC 

·  SARS vet vendor 

·  Phone call 

“Try to converse with them about their business and the quote at hand, to  find out what their timelines are. After the call, do a follow up with an email and see what their turnaround time is like”

7. How do you go about getting discounts from suppliers?

Mpumi says:

“Once we have worked with them before and have developed a level of trust, it becomes easy to negotiate discounts and credit due to the existing relationship.”

Zola says:

“Sometimes it depends on how large the order is, but once you’ve have purchased from a supplier more than twice, you can ask them for a discount or credit, which they will most likely to issue (as a thanks for, and commitment to, your business)”

8. How do you deal with supplier issues once the project has started?

Mpumi says:

“You should liaise directly with the supplier and remind them of the initial promise. If they fail to deliver they are obligated to issue out a refund.”

Zola says:

“Sometimes when a supplier can’t deliver on a project for certain goods they’ve quoted/invoiced you for, they will most likely give you a refund. Some will go out of their way to procure whatever it is that you need. Some won’t be honest, but when a supplier is credible and wants more business from you, they’ll communicate and effectively what they can and cannot provide.” 

9. What’s the best advice regarding supplier procurement and management that you can offer?

Mpumi says:

“Don’t rely solely on Google’s word about suppliers, entrepreneurs need to physically see where suppliers are located to avoid being scammed.”

Zola says:

“Suppliers are people too, treat them with as much respect as you would like to be treated with. Communicate with them and effectively about your capital issues, find out if there aren’t other ways you could explore the working relationship so they can trust you, and you them.”

Thanks to both Zola and Mpumi for their help. We all hope that this information proves to be helpful for you and your business, if not today, then in future.