18 Ways Prospective Suppliers Spook Buyers
When Is It Too Scary To Award Business To A New Supplier?
PurchTips Edition #387
By Charles Dominick, SPSM, SPSM2, SPSM3
Halloween is near – a time when it’s easy to be spooked by macabre imagery that seems to be everywhere. In procurement, we can be spooked all year long by certain prospective suppliers trying to win our business.
It’s good to be spooked by certain suppliers. Selecting the wrong supplier can lead to horrifying results for our organizations. Here are some characteristics of prospective suppliers that should spook you:
- No experience supplying the product or service you are sourcing
- Unprofitable or declining performance on their financial statements
- Unwillingness to provide financial statements at all for transactions that are critical to you and big to the supplier
- An imminently-expiring union contract
- Lack of contingency plans
- Location in natural disaster-prone regions
- Anomalies or omissions in proposals and/or specifications
- A pricing structure that is significantly and illogically lower than the rest of the market
- Lack of internal performance metrics
- A sample that doesn’t comply with your specifications
- Reference checks that do not go well
- High employee turnover
- Unresponsiveness or inability to complete tasks on-time during the sales/sourcing process
- Bad publicity
- Negative word-of-mouth
- An “F” rating with the Better Business Bureau
- New management
- A downsized workforce
Want to get more procurement articles by email for free?
Members of the NLPA get great articles just like this by email every two weeks. As a member, you will also get access to:
- The Procurement Training & Certification Starter Kit
- The latest Purchasing & Supply Management Salaries Report
- Leading-Edge Supply Management™ magazine
- Members-only webinars 10x per year
- And more!
And the best part is that membership in the NLPA is Free! Sign up today and you'll receive a username and password that will allow you to access all of the benefits that come with the NLPA membership.
Copyright 2017. This article is the property of the Next Level Purchasing Association and may not be copied or republished in any form without the express written consent of the Next Level Purchasing Association. Click here to request republishing permission.
This is the Web-based version of this article. Click here for the printer-friendly version.