3 min read

A Checklist for Healthy and Profitable Supplier Relationships

Suppliers and vendors are important business partners and you need to select them carefully. Use this checklist to qualify your suppliers.
A Checklist for Healthy and Profitable Supplier Relationships

Establishing positive relationships with suppliers will make the ongoing task of managing your business easier and can increase your profitability.

The following checklist will help you select the right suppliers, review existing vendors, and assist in evaluating new relationships.

Supplier Relationship Checklist

Follow these 12 steps and ask the associated questions of each existing or potential supplier or vendor your business engages.

Step 1: Establish a reliable reputation

  • How is the supplier viewed by other buyers?

Step 2: Confirm sufficient level of service

  • What is the level of service that this vendor provides?
  • How does the vendor react when you need emergency service?

Step 3: Establish a fair product price

  • Are the suppliers prices competitive in the market?
  • Does the vendor buy in sufficient volume to keep prices low?
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Step 4: Validate the appropriate quality

  • Does this purveyor provide the quality level you demand?

Step 5: Inspect the level of cleanliness

  • Are you able to visit the purveyor's plant or warehouse?
  • What is the condition of the purveyors warehouse and delivery vehicles?

Step 6: Match quoted prices to invoices

  • Does the vendor charge on the invoice the price that was quoted in the bid?

Step 7: Match purchased quantities to deliveries

  • Are there discrepancies between what was purchased and what was sent on a delivery?

Step 8: Confirm required frequency of delivery

  • Does the vendor's delivery frequency meet your needs and preferences?

Step 9: Assess vendor personnel

  • Are you receiving the level of service that you desire from the sales, ordering and delivery personnel?
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Step 10: Analyze level of additional support

  • Does the purveyor have a system to help you promote the products you purchase?
  • Are point-of-purchase and other merchandising materials available?
  • Can they provide financial or other assistance in producing your products and services?
  • Do they have marketing dollars to invest in promotion?

Step 11: Assess the condition of supplies

  • Is the condition of the delivered product as requested?
  • Is the product delivered at safe and proper temperatures?
  • What is the condition of the shipping container?
  • Does any product appear to have been repackaged?
  • How frequently does the product have to be returned?

Step 12: Confirm returns

  • What is the response or the level of difficulty in receiving credit for products that are returned to the vendor?

The target score here is 12/12. You want your vendors to pass 100% of these hurdles (the ones that apply to your vendors and business). If a supplier doesn’t pass this checklist unscathed, it’s time (at very least) for an honest conversation with them and consideration of alternative vendors.

Final Thought

Select suppliers and vendors as carefully as you would choose a business partner. That is what they are. Any good partnership is built on shared expectations and open, honest communication.

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