Simple measures to protect yourself from supplier risks

Risk is inherent in any business

When considering buying a new product or service from a supplier, you will run risks, including: supplier risk.

You may have unpleasant surprises, including:
• The supplier's product or service could be of poor quality
• The supplier may not perform the service
• The supplier may go bankrupt

There are harmful consequences for you and for your business if these things happen.
The risk is that your organization could lose money or even precious time to carry out projects that are decisive for its development. Your reputation as an excellent buyer could then suffer greatly...
As an agent of your organization, you must take steps to protect your business against this risk.
It would be too complicated to go into the details of supplier risk management and the strategies to adopt in this short article.

However, let us give you these few tips for managing risks when it comes to buying a new product or service, or when dealing with a new supplier:

1. Get a sample before you commit

Get a sample from your supplier before making a long-term commitment. Indeed, if you buy a product, request a free or low value sample so that your organization can assess its quality. If you are buying a service or product that is difficult to obtain a sample for, then ask for testimonials from customers similar to your organization, or even try to communicate directly with these customers. There's no better proof that a product or service is right for you.

2. Ask for a satisfied or refunded guarantee

You should not lose money if you are not satisfied. Ask your provider for a money-back guarantee. If the supplier refuses, you better not do business with the supplier. After all, why should you trust a product or service when it doesn't have that of the supplier? If the supplier offers the guarantee, the load on your shoulders is much lighter.

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