When starting a new business, one of the most critical steps to ensure success is to secure the right suppliers. Whether you're sourcing products or raw materials, getting suppliers on board can make or break your success. But how do you approach suppliers when your business is still new? The key lies in reducing their perceived risk.

Understanding Supplier Risk

Suppliers, like any other business, want to minimize their risk. They typically assess risk based on several factors, including:

1. The Size of Your Order: Larger orders can make suppliers more hesitant, especially if there’s no past relationship. A small but regular order might ease their concerns.
2. Past Relationship: If you have a history with a supplier, they’ll feel more comfortable. For new businesses, though, this can often be a hurdle.
3. Payment Terms: Offering to pay upfront is the quickest way to alleviate a supplier’s risk. If you're willing to pay in advance, the supplier is more likely to overlook the size or reputation of your business.
4. The Size and Reputation of Your Business: Larger, more established companies seem less risky to suppliers. As a new business, you might not have this advantage, but you can still present yourself as serious and professional by clearly understanding and articulating your needs.

Making a Good First Impression

The simplest way to reduce a supplier's risk is by offering to pay upfront. Suppliers are ultimately concerned with getting paid, so paying in advance reassures them that you're serious. However, conveying legitimacy goes beyond payment alone.

Before you contact a supplier, ensure you know exactly what you need. Being indecisive or vague may signal inexperience, which can scare off potential suppliers. Take time to research and fully understand your business needs, so when you do reach out, you can confidently present your request or offer.

Some suppliers have websites where you can order limited quantities of products at retail prices. For wholesale rates, however, you’ll likely need to set up a wholesale account. This typically involves submitting business and tax information, which again, demonstrates to suppliers that you're operating a legitimate business.

Building a Relationship with Suppliers

While securing the first deal with a supplier is important, your long-term success depends on building strong relationships. Suppliers can be much more than just product sources—they can also offer valuable insights into market trends, new product opportunities, and even help you refine your offerings.

Suppliers generally fall into four categories:

1. Manufacturers: Typically offer the lowest prices, but shipping costs might be higher depending on their location.
2. Distributors: They offer flexibility in terms of small orders from various manufacturers, though at a higher price per item.
3. Independent Craftspeople: Often offer exclusive distribution deals for unique, handmade products.
4. Import Sources: Many businesses purchase foreign goods through domestic importers, which can streamline the process but come with additional costs.

As you explore different supplier options, remember that reliability and stability are critical. You need suppliers who can consistently deliver the right products on time and who have a solid track record. Additionally, the supplier’s location plays a role. Shipping costs and delivery times can vary greatly depending on where the supplier is based, so consider this when making your decisions.

Finding the Right Supplier

Whether you're reaching out to manufacturers, distributors, or independent craftspeople, the key to success lies in reducing their risk, showing your professionalism, and building long-term partnerships that can sustain our business into the future.

By being prepared and demonstrating your seriousness, you’ll increase your chances of securing the suppliers you need to grow your business.

There are plenty of resources out there for finding and setting up accounts with suppliers, but requesting no-cost and confidential one-on-one business advising from the Nevada Small Business Development Center (Nevada SBDC) is a great first step.

Through the State Small Business Credit Initiative (SSBCI), Nevada SBDC advising services are designed to prepare you for access to capital, thereby promoting economic growth through business starts, increased sales and job creation. With the idea to address market gaps and promote the growth of small businesses across all communities in Nevada, this program aims to enhance a business’s capacity not only to secure capital, but also fortify its operational resilience, positioning it for sustainable growth and success in a competitive market.

Learn more about SSBCI and get matched with a Nevada SBDC advisor that best suits the needs of your business today at https://nevadasbdc.org/ssbci/.

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