If you are trying to source inventory for your business, it is important for you to ask the right questions. Some of these questions you need to ask your suppliers, while other questions you need to ask yourself. If you do not ask the right questions, you will have a difficult time carrying out appropriate strategic sourcing. On the other hand, if you take the time to ask the right questions, you will put your business in the best position possible to be successful. What are the most important questions you need to ask? Take a look at a few key questions you should not overlook during the sourcing process.
What do I think my needs will look like in the future?
First, you need to think about not only what your needs are today, but also about what your needs are going to be in the future. For example, you may have enough inventory to meet the needs of your customers and clients right now, but what happens if your business starts to grow? You need to make sure you have enough inventory to meet your needs down the road as well. This is something you need to discuss with your supplier. As you scale up, you expect your supplier to scale up as well. Make sure your supplier can still meet your needs even if your business begins to grow.
Do I have an appropriate demand forecasting system in place?
You should also make sure that you have an appropriate demand forecasting system in place. This is particularly helpful if you work in a business that is seasonal. If your demand forecasting system tells you that you need to order more of something because your demand is about to go up, you will have the ability to reach out to your supplier ahead of time. This will make it easier for you to develop a strong relationship with your supplier, which is important for your sourcing process. Make sure you understand how to appropriately forecast demand for certain products and services you offer.
How do you like to be paid?
Do not forget to ask your supplier how he or she wants to be paid. This is important because you need to have your supplier’s preferred payment method ready. Even though there are a lot of supply chain difficulties in the current environment, you can alleviate a lot of them by keeping your supplier happy. If you understand how your supplier likes to be paid, you can use that payment method to keep your supplier satisfied. Furthermore, if you realize we do not have the ability to pay using that specific payment method, you know that you should probably go with a different supplier.
Can you give me a copy of your liability insurance certificate?
Before you decide to go with a specific supplier, you need to ask your supplier for a copy of his or her liability insurance certificate. Liability insurance is important because it protects not only you but the supplier as well. If something happens to your cargo as it is being transported from place to place, a liability insurance policy can reimburse you for the lost cargo. You also need to take a look at the limit of the liability insurance policy. Make sure it is enough to cover the value of the cargo you are ordering.
What factors are going to dictate your prices?
If you want to budget effectively, you need to know how much you need to pay for your inventory. Therefore, take a few minutes to talk to your supplier about what will impact his or her prices not only today but down the road. Then, take a look at how those factors are changing. You do not want to be blindsided if the price rises in the future. You may also want to look at a chart of historical pricing. If you understand what has happened in the past, you may be able to predict what will happen in the future. Your supplier should be open and honest with you about the factors that will dictate the prices that he or she will charge.
Ask the Right Questions When Sourcing Inventory
Ultimately, it is important for you to ask the right questions during the process. Even though it can be frustrating if it takes a long time to find the right supplier, it will pay off in the end. Right now, the business environment is more competitive than it has ever been in the past, and if you take the time to ask the right questions, you will develop a strong relationship with a supplier who can help you meet the needs of your customers and clients. Make sure you have a firm strategy in place for your sourcing process.