How to Select the Right Raw Material Supplier

Taylor Howe

3 years ago

Are you looking for a raw material supplier for your business but aren’t sure which supplier to choose?

Raw materials play a very important role in the production process of every CPG brand. Consistency in raw materials is essential for creating standardized, mass-produced products.

If you’re only considering price when choosing a raw materials supplier, you’re going about it all wrong. There’s a lot more you need to take into consideration.

Read this blog post to learn how to select the right raw material supplier.

What to Look For in a Supplier

To choose the right raw materials supplier for your business, you need to know what to look for. As we said, you need to consider more than just your budget when searching for a supplier.

The main things you need to consider are the quality of the company, how much value you’ll get for your money, and the potential long-term partnership you may be able to establish. Let’s take a closer look at each of these key factors for choosing a supplier:

Quality

When searching for a raw materials supplier, one of the biggest things you need to take into consideration is quality- both quality in the raw materials and quality in the supplier.

Communication

To find a high-quality supplier, look for someone who has excellent communication skills. If the vendor you work with isn’t responsive, your entire supply chain will suffer. Before hiring a supplier, ask who you’ll be communicating with the majority of the time. Will you be working with a dedicated salesperson, or will you be referred to a general helpline?

You also need to figure out how quickly and efficiently the supplier will respond to your inquiries.

Knowledge and Experience

A quality raw materials supplier will also have ample knowledge and experience. The supplier you hire should be well-versed in knowing how to improve the end-use of material components.

As we all know, knowledge is often acquired through experience, so you should also ask the supplier how long they’ve been in business. While newer companies may still offer the same quality product, their workflow and partner network likely won’t be as established.

Quality of Material

Just because two companies sell the same product, doesn’t mean those products are of the same quality. The quality of raw material can vary greatly based on its country of origin and in-house quality standards.

When ordering materials, it’s vital to understand what the application requires in terms of quality materials. You’ll also need to check if your application is subject to the FDA or any other regulations.

Value for Money

Of course, money is always a factor when running a business. However, this doesn’t mean you should hire the cheapest supplier you can find for the sake of saving money.

When speaking with suppliers, ask for a cost breakdown. In the end, you should try to strike a balance between fair pricing and quality service.

Potential Partnership

Ideally, you want to find a raw materials supplier that you can work with for the long term. For this reason, you need to consider whether the supplier would potentially make a good long-term partner.

Before hiring a supplier, ask what their idea of an ideal partnership is and what they’re looking for in customers.

Choosing a Raw Material Supplier

Once you know what to look for, it’s time to start searching for a raw materials supplier. Here are the primary things you need to keep in mind:

Establish Your Criteria

First, you should make a list of everything you need from a supplier. Here are a few things you may want to consider:

The Ideal Lead Time: In other words, how long you want to wait between purchasing the order and receiving the materials
Quality Assurance Process: The steps your supplier takes to ensure the raw materials are top quality and stay in good condition throughout the transportation process
Payment Terms and Conditions: What are the terms surrounding how you’ll pay for the materials?
Communication Standards: How responsive is your supplier?

Research Your Options

Once you’ve established your criteria, it’s time to start researching your options. To find the right supplier, you can start with general online research.

Spend some time looking into the supplier’s reputation by reading online reviews. Depending on your business model, you may need to choose a wholesale supplier or private label manufacturer.

When researching, you should also look into the supplier’s insurance. A quality supplier will have insurance and fraud protection.

Are you wondering how to find the right co-packer for your business? Check here to learn how it’s done!

Evaluate Bids from Raw Material Suppliers

Once you’ve created a shortlist of potential suppliers, it’s time to put out a call for bids. To do this, you’ll likely need to fill out a Request for Proposal Form or a Request for Quotation Form.

When filling out these forms, be as detailed as possible. Make sure to note delivery dates, quantities, quality standards, and locations so you can get the most accurate bid possible.

Once you’ve gathered the bids, it’s time to evaluate them. Compare each supplier to see which one best meets your company’s budget and quality needs. Also, make sure the supplier’s pricing won’t cut into your profit margin.

Once you choose a bid, contact the supplier to negotiate the terms. If you’re unsure about some details of the contract, you can always consult with a lawyer.

Monitor Your Supplier’s Performance

Once you’ve hired a supplier, your job isn’t over. You still need to monitor the supplier’s performance. Keep tabs to ensure they’re living up to their promises by shipping orders on time, sending complete orders, and providing your business with high-quality materials.

Conclusion

As you can see, there’s a lot that goes into choosing a raw material supplier. By putting these recommendations into action, you’ll be able to find the right supplier for your needs.
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