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Treating suppliers as partners
May 07, 2012
Rey Calooy knows what it’s like to hunt for good suppliers, and to be one himself. He is president of RNC Marketing based in Talisay City, Cebu, which currently supplies sachets of coffee, sugar, and creamer to Starbucks, Bo’s Coffee, the Manila Hotel, Chowking and Jollibee, and to several other companies in Manila and Cebu.
Also president of the Filipino Cebuano Business Club Inc., a 5,000-strong group of micro, small and medium enterprises in Cebu, Calooy is legendary in the province for growing his business from scratch, initially as a supplier of dust rags for furniture companies (talk about rags to riches). Showing his entrepreneurial drive, Calooy constantly shifted his business to serve the needs of his potential customers, until he reached the top companies in the country.
Being the classic middleman—buying supplies from one company to sell to another, profiting from the margins he adds on—Calooy has the following pieces of advice on how to assess your own suppliers:
Treat suppliers as partners.
Many business owners think because they give suppliers business, they can exploit the latter by asking for personal perks and unreasonable demands. “They seem to get this issue backwards,” says Calooy, who reminds entrepreneurs that almost every business, whether they make a product or service, is dependent on suppliers. Make suppliers part of your strategic business plan, he advises, and be loyal to good, reliable ones. “You must build a good relationship with your suppliers the same way you do with your customers,” he adds.
Look for quality.
The materials your supplier provides you directly affect the quality of your products. “If your products are of high quality, your customer is more satisfied and returns less of your goods, which boosts your cash on hand and profit,” Calooy says.
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