Running short on stock when demand is high is something that every retailer wants to avoid. To ensure steady supply and avoid a stockout, it helps to have additional suppliers as backup. How do you know when you need additional suppliers, and how do you find suitable suppliers?
Situations when you might need an additional or backup supplier
Your supplier cannot meet the entire demand
For most retailers, the best sales happen during the holiday season. This is the time when demand skyrockets as last-minute customers scramble to finish their shopping and take advantage of great offers and discounts. You risk a stockout if you rely on only one supplier to meet your entire demand. To prevent this, go over sales data from your previous holiday season to see which products had the highest demand. Were your suppliers able to provide enough items so you could avoid running out of stock for those products? If the answer is no, then you might want to look for new suppliers as backup.
Trends and customer preferences changing trends and customer preferences
A product that was popular last holiday season may not be as popular this year. Customers’ tastes and preferences play a major role in determining a product’s popularity. Looking at your sales trends as soon as the holiday season is over can help you see which product could become a hot seller next year, and decide whether to look for additional suppliers for it.
Factors to consider when choosing a supplier
A reliable supplier is one who’s always easy to communicate with, and readily available to answer your questions. You should be able to contact the supplier through multiple means, including email and phone.
High prices do not always mean high quality. Compare estimates from several potential suppliers and negotiate with the supplier that offers the best quality for the prices they quote.
During the holiday season, you might have extra expenses like decorations and advertisements. Flexible payment terms will let you pay your suppliers a little later while keeping cash available for immediate requirements.
You might find it difficult to pay your invoices in full during the holiday rush. Many suppliers offer partial payment options. You can negotiate with suppliers about the percentage of payment they will require and choose the deal that’s convenient for you.
Since there’s a lot to be done when preparing your business for the holidays, it’s easy to get lost in the pile of work. But we’ve got you covered. Check out our holiday resources, that include an ebook, video, and a few webinars, to help you get everything in order for the upcoming season!