Vendor Selection Techniques

Vendor Selection Techniques and Considerations

7 Things to Consider When Choosing A Vendor

Your goal should always be to get the maximum value for the lowest possible cost
To be assured that you are getting the best deal, you need to ask for more than one bid
Be wary of vendors who submit estimates far lower than others
You may receive less than acceptable products or services
Or, you may end up paying more than the estimated cost in fees that weren’t part of the quote
Communicate to prospects the full extent of your needs so you receive an accurate bid

Price doesn’t matter if the product or service is poor quality
Where applicable, ask to see samples of the vendor’s previous work
For instance, if you are hiring a company to remodel your office space, ask for a list of other projects they completed and take a field trip to see if the finished job meets your expectations
When hiring for service, ask about employee training
Service employees should receive training to ensure they provide the level of service your customers are accustomed to
If the vendor does not put much emphasis on training, you may want to think hard before selecting them

Check References

In many ways, hiring a vendor is like hiring an employee

Most people would not employ a worker without checking references, and you should not make that mistake when selecting a vendor.
Require each vendor to submit a list of at least three references. If a vendor hesitates, that should raise a red flag.
Then make sure you call those references and ask questions such as:
Was the vendor punctual for appointments?
Were their employees professional?
Were you comfortable with the employees who came to your business?
How would you rate the quality of their products or services?
If something went wrong, did they make it right?
Would you use them again?

Companies with a reputation for exemplary customer service will more than likely take good care of you
As mentioned above, references are invaluable
Request vendor referrals from people whose opinion you trust
Then ask those customers about their experience with the customer service particularly – service after the sale
Don’t forget to take advantage of the digital age in which we live
People who have poor customer experiences may vent their frustrations online. An Internet search can uncover this kind of feedback
Do a Google search “[vendor name] reviews”. You may be surprised at what you find – both good or bad!

Your business integrity depends on the integrity of the vendors you use
Try to learn a little bit about your vendors and how much importance they put on operating with high ethical standards
There are several ways to find out information about a company
The Better Business Bureau, Home Advisor or Angie’s List all provide valuable information that can help you find out information on a prospective vendor
An Internet search “[vendor name] news’ can also yield a lot of company information, both positive (e.g.–charitable involvements) and negative (e.g.–newspaper articles about lawsuits)
As with most things, it is always best to be aware of issues before you sign on the dotted line

When a vendor represents your organization, their employees do the same
I used a vendor once that sent a technician who made inappropriate advances toward our administrative assistant
This is perhaps the most difficult factor to check. One suggestion is to read the company’s employment ads
Job postings contain the important qualities a company looks for in a prospective employee and can provide clues as to how their workers conduct themselves on the job
For example, I recall seeing a television ad from a heating and cooling company looking for new technicians

Word of mouth is always a great way to find a vendor if everything else is equal
Leverage professional networking groups to which you belong
Ask the people in your Chamber of Commerce directory, your LinkedIn connections, the members of your professional organizations and the people who you attend church with who they used in similar situations
People will share honest opinions and often have the answer to your need based on a similar experience

Leverage the experience and relationships you already have
If you have a current vendor that you like, I still recommend soliciting other bids to ensure that the vendor is still providing the best value for your money
Sometimes vendors raise their price after being with a business for a few years because they feel like they have the business and its safe
Don’t allow yourself to fall into this trap. Keep the relationship professional and rebid the job every couple of years to ensure you are getting the best value for the money
Look at your customers as potential vendors

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