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Are Your Vendors Making the Grade?
by Eric Martin
Vice President of Marketing
Lodging Kit Company
Choosing the best vendors to meet your procurement needs are decisions not to be taken lightly. The vendor selection process should be standard throughout the property and the process should be reviewed and modified periodically in order to ensure all the needs of the property are being addressed. In this article, the reader will be advised on some of the qualities you should look at when choosing a new vendor. I will use housewares as an example but the ideas can be applied to most procurement areas.
There are numerous qualities that one may want to identify in a vendor prior to conducting business with them. The following qualities are crucial and should never be overlooked. They are honesty, service, and price.
Honesty. This is an easy one, however, a hard one to determine during the vendor identification process. It can be made easier by a lot of open questions and face-to-face meetings combined with good old-fashioned gut feelings.
You can ask the vendor questions you already know the answers to. One example is "I want a non-stick set of cookware, and I am also interested in the heavy duty 18/10 stainless steel utensils." Most housewares vendors will recommend another option, as steel utensils damage non-stick cookware. If a vendor responds to a question with an answer that is more in line with getting the sale rather than preserving a strong and honest relationship, then you may want to avoid that vendor.
Service. This quality covers a broad spectrum. Good service includes shipping policies, distribution locations and channels, product consistency, follow up care, salesperson turnover, and damage control.
Shipping Policies. How fast will the vendor get your product out the door? Does the vendor have a free freight minimum? Are there minimum quantities or does the vendor require orders be in case quantities? If the vendor does charge for freight you should ask what are the least expensive options.
Distribution Locations/Channels. Does the vendor have a distribution center in your region? This is not a big deal if the vendor ships right away but it may make a difference if the order is high priority and you do not want to pay for express shipments. Is the vendor a stocking distributor or do they mainly drop ship their products? Drop shipping will take longer than if the product is in stock.
Product Consistency. Does the vendor proactively try to maintain a consistent selection of product? For some products, this is crucial especially when it comes to specific patterns. Flatware and dinnerware patterns are very easily maintained as there are numerous manufacturers worldwide making identical and similar patterns. When in doubt, ask the vendor if there is a chance a pattern or product will be discontinued and if so will they be able to replace it with a replica.
Follow Up Care. During vendor selection you should ask if you are going to be able to work directly with the salesperson you have had all the contact with. Often times a salesperson will establish an account and you may only talk with that person periodically with most of your inquiries being taken by a customer service person who may not be familiar with your account or your needs.
Damage Control. This one may need explaining. Regardless of the vendor there may be an occasional problem with an order. You will be able to determine if the vendor is strong by the manner and the time it takes them to correct the problem and satisfy your needs. If their response is slow and you feel you deserve better treatment then find a new vendor.
Price. Regardless of the economic times, the bottom line requires consistent monitoring. This should never be the deciding factor but often times it gets the most attention. When determining the price of numerous products from various vendors ensure you are comparing "apples to apples" as far as quality goes. When in doubt, request a sample.
The criteria for choosing a vendor will ultimately determine your procurement success. As long as the selection process is identical for all the property's procurement categories you should see success. What cannot be forgotten is that once the vendor is chosen it is up to both parties to work hard to transform a partnership into a relationship.