Supplier Strategy: Be Loyal Buy Loyal
October 04, 2019
Aundrea Wilcox | Executive Director, KOSBE
Your suppliers are your customers also, so treat them with the same courtesy and respect that you give to your customers, and keep your promises. That means paying in full and on time as agreed, promptly completing transactions and returning phone calls, and being loyal in general. “Be Loyal Buy Local” campaigns abound as the marketplace becomes more global and more competitive, and small businesses fight for every customer. However, continuing to do business with a non-local supplier that you have developed a long time relationship with is encouraged if they are offering you a fair price and you are happy with the level of care. If they haven’t done anything wrong, why would you be disloyal and punish them by giving your business to someone else after such a long time, just because they are closer in proximity?
Instead, give other suppliers an opportunity to earn your business.I believe you should ‘be loyal and buy loyal.’ You can even use the 80/20 Rule and buy from both, which will reduce your risk of dealing with only one supplier. Choose to buy 80 percent of what you need from a local supplier and 20 percent from another non-local top-notch supplier.
It's smart to keep your supply chain close for several reasons:
- A local supplier can usually respond faster and deliver faster.
- It's cheaper, e.g., transportation and shipping costs.
- Local sourcing supports the local community (creates and retains jobs) and builds goodwill.
On the other hand, when you require large quantities, outsourcing may be necessary—particularly if your current supplier is having a hard time keeping up with your demand. Also, it's true, you can sometimes get a better deal further away from home. This could be due to cheaper labor or resources.
To be successful and profitable, small business enterprises must be able and willing to create and retain jobs locally, as well as bring money into the local area economy, by selling products and services outside of their community. This is truly economic development.