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  • Thomas Pannell

Things to look our for when dealing with new suppliers

One thing we hear time and time again from people that come to us for help is that they’ve had a bad experience with a supplier.


Most of the time this is a factory in mainland China where costs have soared, quality has changed, or promises aren’t kept. The worst story I hear is a factory taking their money and then folding or disappearing straight after.


When we have an initial chat with new customers, they want to know how we ensure that this kind of thing won’t happen to them again.


The honest answer is we can’t ever be 100% sure. However, we have a lot of experience in the industries we work in, have bilingual staff and can spot the red flags that something isn’t going to plan. If we act early, we can reduce or eliminate the risk for them entirely.

So, in this post I wanted to share a list of some of the red flags we always look out for when working with new and existing suppliers:


  • Prices that are too good to be true. You should have a good idea about what your products will cost. If a quote is way below what you’d expect, something is definitely not right. This isn’t necessarily deceit, more likely it’s that they’ve not understood your designs or the specification of what you have asked for.


  • There is also something I call price creep. You get a low quotation at first, but as your specification is outlined extra costs keep getting added. You’ll end up with a price on par with the market rate or even more expensive. I think the intention here is to get you to dismiss other quotes, leaving you with no alternatives and helping them win your business. Make sure you specify everything up front with all potential suppliers so you can compare like-for-like quotes.


  • “Yes” to every question. Agreeing to everything you say. Not asking any questions in return. If a supplier is answering very quickly and emphatically with “yes” and never asking for extra details from you, they are either desperate to get their hands on your money or they don’t actually understand what you are asking for. If they don’t know what you are asking for, you certainly won’t be getting what you expect!


  • I’d also pair the above with saying “X job is difficult”. This is a soft admission of a bigger problem. To me it translates as “we didn’t understand the product”, “we don’t know how to do it” or “we have never done it before”. If they say this is at the sample stage, you’re going to see a big price increase. If it’s after production has started, then you are going to have big problems.


  • Staff turnover. This one would worry me with any supplier – in the UK or overseas. Are people leaving because the company is poorly run? Maybe they know it’s about to go bust? I would take a long pause on working with a supplier if the people I spoke to were changing every couple of weeks. A short delay is better than losing your money.


  • Ignoring a specific point. You keep emailing asking for details or with a request. Every reply ignores the same question, no matter how many times you ask it. They are choosing to ignore it because there is a problem – and they don’t want to raise with you. It could also be that they don’t know how to communicate the problem with you – being able to speak the same language really helps here!


  • Meetings at an office and no factory visits. If I can’t see the factory and production lines it tells me a couple of things, either they don’t have their own facility and sub-contract all their orders (i.e. they are just an agent with no real control over production) or they have over capacity. If they do take you a factory don’t just look at the machines, get a feel for what’s going on operationally – boards with orders and scheduling (or a lack of), staff busy or just sitting around smoking, lots of desks in the office but no staff, etc.


  • Lastly, an honourable mention to something wholly ridiculous that has happened to be a couple of times – returning the samples I sent them as their prototype for me to check. I wrote on the inside of them with a Sharpie. Either they’re not honest, don’t care about your project… or maybe they took attention to detail to another level?!?


If you have had problems with suppliers before and want to find a better way to source products, why not get in touch with us to see how we can help. From product design to price benchmarking, translation of product specs to sourcing, there are a lot of ways Pinpoint can help you.


Drop us an email at info@pinpoint-ps.com or call our MD Thomas Pannell on 07917 606 208 for a chat.

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