What Are the Best Tips for Vendor Selection?

Choosing the right vendors for various goods and services is very important to the well-being of any business. As part of the process for vendor selection, companies consider factors such as the scope of products offered, ordering and delivery efficiency, quality of the products, and pricing. Many companies will also take into consideration the customer service and support aspects of the vendor, and how well a given vendor responds to emergency situations that call for support above and beyond the usual process.

One of the first steps in vendor selection is to determine just exactly what is needed from the vendor. Here, the goal is for the client to define requirements in terms of quality, price, and other relevant factors. Doing so before actually beginning to evaluate any potential vendors will make it easier to articulate those needs and quickly identify any vendors who fit that basic profile.

After compiling a basic profile of what the ideal vendor will provide, the next phase of vendor selection involves compiling a list of possible suppliers or providers who, on the surface, appear to meet the needs of the customer. Suggestions for inclusion on this list can come from any number of sources, including recommendations from others in the business community, research conducted on the Internet, or even word of mouth from employees within the firm. During this first sweep, the idea is to identify as many vendors who are likely candidates as possible, making sure that any viable candidate is not overlooked.

As the process of vendor selection continues, investigating each supplier on the list in greater detail helps to slowly eliminate options that are less likely to meet the needs of the company. The evaluations will often focus on credit checks of each vendor, consulting various consumer protection agencies and business bureaus, and even contacting current or past customers of the vendor. Doing so helps to ensure that a given vendor is financially stable, has a proven track record within the industry, and that customers are generally satisfied with the way they are treated. Any vendors who seem to have issues in any of these areas can be removed from the list.

Once the vendor selection list is narrowed down to a few choices, it is not unusual for a client to invite the remaining suppliers to provide some type of proposal outlining their product lines and pricing. Information on ordering and delivery of products is also often addressed in the proposals. When this approach is used, providing each of the vendors with a formal Request for Proposal that defines the order and structure for the proposal will help make comparing those remaining vendors an easier task, since the data can be easily placed into a vendor selection matrix or spreadsheet for side-by-side evaluation on each key point.

The final phase of vendor selection is deciding which of the vendors who submitted proposals is the best fit for the company’s needs, and notifying the vendor that he or she has been chosen as the new vendor of choice for those types of goods and services. From there, the two parties may choose to enter into a contractual agreement that helps to lock in the pricing presented in the proposal. Typically, companies will keep the remaining proposals on file for a period of time, allowing the company to review those proposals in the event that the selected vendor fails to deliver the level of service and support detailed in the terms and conditions of the contract.