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Working with Suppliers – Business Studies

Firstly, there are many factors a business should consider when choosing the ‘Right Suppliers’: Flexibility, Price, Location, Payment Terms (Discounts and Credit), Frequency of Seliveries, Reliability, and Quality.

There are two main types of Suppliers: short-term relationship suppliers and long-term relationship suppliers.
Short-term relationship suppliers are suppliers where you don’t repeatedly go back to for their service of a product or a supplier where you are buying from a big supplier or on the internet. Short term suppliers usually have:

  • The cheapest price on their service or product.
  • Low customer service.
  • Low quality.
  • ‘One off’ deals.

Long term suppliers are suppliers that develop a relationship with the customer and therefore:

  • Customer service is high so customer repeatedly buys from the supplier.
  • Quality is higher.
  • Delivery is faster.
  • Price is higher as customers are paying for the relationship.
  • More reliable

Therefore the argument is should you pay a little extra for a long term supplier or risk the reliability and quality by going for the short term supplier that is cheaper?

Overall, I always feel long term suppliers are the best option for one main reason. Yes, you are paying a little bit more, but the service you get is much better: if anything goes wrong, you are sure to get it fixed. Whereas, with a short term supplier, like a dealer on the internet, if your product or service is faulty when you receive it, it is much more difficult for it to get fixed wasting your time and money.


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