Sourcing and Establishing Suppliers

Importance of choosing the right supplier

They directly affect business quality, price, service, and reliability.

Key compliance requirements for suppliers

Must hold an ABN, follow WHS standards, and food suppliers need an FSP.

Breadth of range

Evaluating whether a supplier provides all necessary items for the business.

False economy in pricing

The lowest price can cause higher waste, poor quality, or customer dissatisfaction.

Advantages of local suppliers

Offer fresher products, quicker response times, and greater flexibility.

Cash on Delivery (COD) vs Credit Terms

COD can strain cash flow; credit accounts let businesses sell goods before paying.

Benefits of multiple suppliers

Provides flexibility, reduces stock-out risks, and increases price competition.

Combination supplier strategy

Using a primary supplier for key goods and secondary suppliers for flexibility.

Quality considerations

Goods must match consistency, freshness, and suitability for their intended end use.

Hidden costs in purchasing

Additional expenses including delivery fees, storage requirements, and waste.