Supplier Is: Definition & Tips for Choosing a Trusted Supplier

Suppliers have a big role in ensuring product availability on the market. Without reliable suppliers, business operations can be hampered, which ultimately impacts customer satisfaction and loyalty.

Choosing the right supplier is not easy because there are various factors that must be considered. This article will help you understand what a supplier is, its types, and how to choose the best supplier for your business needs.

What is a Supplier?

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In general, suppliers are individuals or companies who provide or sell raw materials to other parties, whether individuals or companies, for use in the production of mature goods or services.

However, there is often confusion between the concepts of supplier and distributor. Distributors focus on selling or distributing products to retailers so they can be distributed to end consumers.

Meanwhile, suppliers are parties who play a role in providing raw materials, components or semi-finished products to other businesses. Suppliers play a role in the supply chain and can be individuals or organizations. 

Suppliers are responsible for ensuring the availability of raw materials of the best quality so that the production process runs smoothly.

Supplier Duties and Functions

Basically, suppliers have a very important role in the supply chain of products that will be distributed to consumers.

1. Suppliers are responsible for ensuring the availability of raw materials to parties who need them
2. Suppliers must ensure that all raw materials can be received by buyers in good condition
3. Suppliers are also responsible for storing raw materials before distributing them to parties who need them
4. Suppliers are responsible for sending raw materials to companies that need them on time
5. Suppliers must maintain good communication with buyers to understand their needs and ensure customer satisfaction with the products supplied.
6. Suppliers must also be able to adapt to changes in market demand, both in terms of quantity, quality and type of materials needed.

Difference between Supplier and Vendor

Supplier focuses on supply chain upstream (upstream supply chain), namely the beginning of the production process, while vendors sell finished goods to retailers or final consumers (downstream supply chain). Meanwhile, vendors are closer to the consumer market than suppliers.

For example, in the restaurant industry, a supplier can be a provider of raw materials such as meat, vegetables, or spices used for cooking. Meanwhile, a vendor can be a distributor of tableware, food packaging, or kitchen equipment that restaurants use to serve food to customers.

The Role of Suppliers in Business

Suppliers have various important roles, including:

• Securing raw materials required for production.
• Maintaining the quality of raw materials to comply with industry standards.
• Manage distribution and storage raw materials with an efficient system.
• Comply with regulations and industry standards to ensure legal compliance.
• Establish transparent transactions with manufacturers and distributors.
• Play a role in product innovation, such as more efficient or environmentally friendly raw materials.

Types of Suppliers

Suppliers can be categorized based on several aspects:

1. Based on Company Model

• Manufacturer: Providing raw materials directly to other businesses.
• Wholesaler: Buy in large quantities from manufacturers and sell to smaller businesses.
• Importer: Bringing in goods from abroad for local industrial or business needs.

2. Based on Location

• Local: Faster and more cost-effective delivery, supporting the domestic economy.
• National: Providing goods on a large scale domestically with a wide distribution network.
• International: Fulfilling the need for premium materials from abroad with more diverse options.

3. Based on Service Frequency

• Fixed Service: Suppliers who provide goods regularly and continuously.
• Sporadic: Only provide goods in certain situations or certain projects.

Read more: Understanding Supply Chain Management: The Key to Business Success in the Digital Era

6 Tips and How to Choose a Trusted Supplier

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Choosing the right supplier is very important for business continuity. Here are some factors to pay attention to:

1. Professionalism and Reputation

• Look for suppliers who have high credibility with a good track record.
• Check customer reviews and collaboration experiences with other businesses.
• For example, suppliers who have collaborated with well-known restaurants can be an indicator of good service quality.

2. Product Quality

• Ensure that the goods provided meet industry standards and business needs.
• Ask for product samples before making a large purchase.
• For example, for restaurants, raw material suppliers must have halal or organic certification according to business needs.

3. Competitive Prices

• Compare prices from several suppliers to get the best offer.
• Don't just focus on low prices, but also quality and service.

4. Timeliness of Delivery

• Choose a supplier that has a good logistics system to ensure delivery on time.
• Make sure there is a compensation policy in case of delays.

5. Flexibility and Adaptability

• A good supplier is able to adapt to changes in market demand.
• Make sure the supplier can fulfill orders in small and large quantities.

6. Service Support and Responsiveness

• Choose a supplier who has responsive customer service and solutions.
• Make sure there is a return policy for goods in case of discrepancies or damage.

Choose ESB Goods as a Supplier for your Restaurant Business

ESB Goods is an innovative solution for restaurant businesses that need trusted suppliers with an integrated supply chain management system ESB Core (ERP Software). 

By using ESB Goods, you will get the following benefits:

• Detect, identify and prevent fraud through a transparent system.
• Process from purchase to payment Connect directly with suppliers for operational efficiency.
• Low and flat platform fees per transaction, ensuring transparency with no hidden costs.
• Supplier backup service which has been verified and trusted, reducing the risk of supply delays.
• Various payment options which is automated through a payment gateway for easy transactions.
• Capital loan services available through the program ESB Capital to support business growth.

Common Mistakes in Choosing a Supplier

Avoid the following mistakes when choosing a supplier:

• Not conducting in-depth research regarding supplier credibility.
• Only focuses on low prices without considering quality.
• Not understanding the cooperation contract well.
• Ignore aspects of supplier flexibility and production capacity.

For example, many restaurant businesses choose suppliers based solely on low prices, but end up facing problems due to poor quality raw materials or supply instability.

Read more: Prevent Restaurant Silence with Precise Raw Material Calculations!

Conclusion

Suppliers have a crucial role in the business supply chain. Choosing the right supplier can increase production efficiency and business competitiveness.

If you are looking for a supplier solution that is transparent, flexible, and can adapt to business needs, ESB Goods present as a platform that offers:

• Price Negotiation: Get the best price transparently.

• Lending: Business capital loans up to billions of rupiah.

• Term of Payment: Payment flexibility up to 3 months.

With ESB Goods, your business can manage the supply chain more effectively and efficiently. Find out ESB Goods in full and find the best suppliers for your restaurant and retail business!