Looking to do business with new vendors, but have limited information about them, these simple supplier due diligence methods can save you lot of time and money.
- The firm and promoters:
Information on suppliers experience in the industry and their financial profile can be found through the following sources.
Table 1: Resources for supplier due diligence
- Technical competence and after sales service:
This comprises information on supplier’s capacity, type of machines, products and testing facility. Some of the sources for obtaining this information are provided below:
1. Product certifications
In some industries, where there are industry specific quality certifications such as HCAAP for food processing, CE for electronics, NABL for healthcare/hospitals, the technical due diligence requirements are reduced to a large extent.
2. Industrial goods market places such as India Mart
These website allow you to search for a number of suppliers for a product and have information on production capacity, product certification, and product range. Some of the websites have user ratings, which may offer some perspective on the vendor.
Most important part of the due diligence is to ascertain if vendor’s vision for his business is compatible with your expectations from the vendor. For example, for a company that is concentrating on minimizing product returns, the vendors would also need to be obsessed with quality.
How can we help?
FineTrain enables entrepreneurs to assess and understand new business opportunities. Our services include supplier due diligence, market research and business feasibility studies. We can identify new vendors for you and also assist you in doing due diligence of your existing vendors.
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