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What specific criteria you evaluate when choosing a key supplier?

There is an extensive focus on customers for each start-up but we tend to forget thinking about our suppliers. We are currently looking to select a service supplier for our future web shop – the courier! We feel the distribution company who will deliver our product to the buyer is the most important supplier as it will have a huge impact on our customers.

What do you evaluate when you select a supplier who is critical to your business?

Answer 3120

I would agree with you that yes Key Suppliers or Key Partners are crucial to a startup’s success. Though it would depend on the product/service that you are startup offering, there can be some generic criteria that one should look for while selecting a key supplier -

  1. Cost Effectiveness
  2. Reputation in the corresponding industry
  3. Reliability
  4. Scope of partnership
  5. Next best alternative
  6. Bargaining power of the supplier (Ref. Porter’s 5 forces model)

There could be many other factors. Now for example, in case of courier services, if you are looking forward to partner up with the best in the industry that might not be very cost effective for you and of course it might not operate in your area.

Answer 3103

Not sure that anyone would agree that “partners” are not a key factor in any business model, though do believe most would agree that true startups are businesses in search of a means of making money that’s never been done before.

As for your question of supplier evaluation, this would vary so much from business to business that it would likely be impossible to get a short answer of use.

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