18 Ways Prospective Suppliers Spook Buyers

When Is It Too Scary To Award Business To A New Supplier?

PurchTips Edition #387

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:

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  1. No experience supplying the product or service you are sourcing
  2. Unprofitable or declining performance on their financial statements
  3. Unwillingness to provide financial statements at all for transactions that are critical to you and big to the supplier
  4. An imminently-expiring union contract
  5. Lack of contingency plans
  6. Location in natural disaster-prone regions
  7. Anomalies or omissions in proposals and/or specifications
  8. A pricing structure that is significantly and illogically lower than the rest of the market
  9. Lack of internal performance metrics
  10. A sample that doesn’t comply with your specifications
  11. Reference checks that do not go well
  12. High employee turnover
  13. Unresponsiveness or inability to complete tasks on-time during the sales/sourcing process
  14. Bad publicity
  15. Negative word-of-mouth
  16. An “F” rating with the Better Business Bureau
  17. New management
  18. A downsized workforce

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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.

By Charles Dominick, SPSM, SPSM2, SPSM3