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Selecting A Supplier

semiconductor chipA very important decision that has to must be made early on in the process of starting your any business requiring the acquisition of electronic components is the selection of a supplier(s). Care should be given to this selection.

The initial selection can prevent future misunderstandings, and even an unnecessary change of affiliation. Dealers should research their potential distributors (background history). It is also important that an alternative list of electronic component suppliers has been considered, in case the primary supplier is unavailable.

Before making contact with a potential supplier, it is important that you understand what you are looking for in one. Consider the following points:

  • If merchandise can be returned, who pays the freight and is there a restocking charge? (i.e. To cover the supplier's administrative and handling charges for putting it back into their inventories)

  • How broad or complete is the assortment offered by the supplier? Does the supplier stock electronic components and computer semiconductors in bulk. Can the supplier serve as an OEM source? Are "Opportunity Buys" (deals,) if offered, available on a regular or occasional basis?

  • How competitive is the wholesaler's pricing policy?

  • What is the chance that the supplier will ship your order complete?

  • What is the turnaround time on orders from the time that they receive the order to the time that it is shipped. (i.e. how much lead time do you have to allow for on an order?)

  • What is their preferred method of shipping goods, or are various methods of shipment available? Note: The choice of how electronic components are shipped depends to a large extent on who is paying for the cost of the shipment.

  • Are prices quoted Free On Board (F.O.B.) warehouse or delivered to the store?

  • If credit has been granted, are cash discounts available to encourage early payment of credit, (i.e. 2% - 10 days, Net 30?) (i.e. If you pay the bill in 10 days, you will receive a 2% discount, otherwise, the balance is due in 30 days).

  • If it is an available option, at what point will orders be shipped prepaid?

  • Is prepaid shipping an available option?

  • Are there volume discounts available for when buying in quantity?

  • Where is the supplier located? Who else do they supply?

  • Are there credit terms available and at what point may you be able to access them? (i.e. you will usually to have to establish a working relationship on a cash basis first before supplier credit may be offered.)

  • Can defective, damaged, non-selling, or overstocked merchandise be returned or be "stock balanced" (substituted) for saleable product?

  • Does the supplier offer advertising support? (i.e. possibly in a co-op form where each of you may share the cost of an ad and how strong is it)

Just in time delivery is accessible to all and T-SAN electronics can help you realize this efficiency.

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