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One supplier or several: what suits your shop
One supplier means a better rate and longer credit. Several mean safety and a real comparison price. Here is the whole trade, and what most shops settle on.
Neither answer is right for every shop. One supplier buys you a better rate, longer credit and one simple account. Several buy you safety, choice and a real comparison price. Most shops that do well end up with one main supplier for the goods that earn them money, and a second one kept warm.
The question is not who is cheapest
Ask a shopkeeper why he buys where he buys and you will usually hear one word: rate. It is the wrong word, because it is the only part of the deal that is easy to see.
A supplier hands you five things at once. A rate. A credit arrangement. A delivery, or the cost and half-day of going to fetch it yourself. A level of reliability, which is really the question of whether the goods arrive when he said. And a willingness to take back what will not sell.
The rate is the smallest of the five surprisingly often. A rate two percent lower, on a supplier who leaves you out of stock twice a season, is not cheaper. It just fails somewhere your ledger does not look.
Say two suppliers quote the same carton
So before you compare anybody, compare the whole package. Then the real question comes into view, and it is not "who is cheapest". It is how many of these relationships your shop can actually carry, and what you are willing to give up for the terms you want.
What one supplier actually buys you
Concentration has real advantages, and shopkeepers who spread their buying too thin usually discover them the hard way.
A better rate for the same money. All your volume in one place is worth more to a supplier than the same volume split four ways. He can see the total, he can plan around it, and he will price for it. Spread the same buying across four names and each of them sees a small customer.
Credit that grows. This is the big one, and it is almost entirely built on a track record with one person. A supplier extends terms to a shop he has watched pay on time for two years. He does not extend them to a shop that appears every third month. If buying stock on credit is part of how your shop runs, concentration is what pays for it.
One account to keep. One set of bills, one payment day, one balance to check. Four suppliers means four running balances, four sets of dates, and four chances to pay the wrong man the wrong amount at month end.
Somebody who takes your call. When the season turns and everybody wants the same goods, the shop that buys all year gets served first. When a slow item needs to go back, the supplier who values your account is the one who takes it back. Both of those are worth more than a small rate difference, and neither shows up on any bill.
What one supplier costs you
Now the other side, and it is not small.
You stop knowing the market rate. This is the quiet one. When you buy everything from one man, you have no comparison, and the rate can drift upward by small amounts for two years without ever looking wrong. Nobody has to be dishonest for this to happen. Prices move, he passes some on and not all, and you have no way to tell which is which.
His problem becomes your problem. His van breaks down, his own supply is late, he has a family emergency, he decides to stop carrying a line you sell well. Your shelf goes empty for it, and your customer buys it two doors down. That is how a shortage on the shelf turns into a lost customer rather than a lost sale.
Your range narrows to his range. You end up selling what he carries. That sounds harmless until you notice that your neighbour has three brands of something and you have one, and his customers are the ones choosing.
The relationship gets hard to leave. After four years of credit and favours, changing supplier is not a business decision any more, it is a personal one. Shopkeepers stay in poor arrangements for years because leaving feels like an insult.
What several suppliers buy you
Spreading the buying answers most of those, and creates its own bill.
The same shop, buying two different ways
You always know the rate. Two live suppliers means a real comparison every month, not a guess. This alone often pays for the extra effort, because it stops the slow drift that nobody notices.
Your shelf keeps working. When one lets you down you place the order with the other and lose an afternoon instead of a week. For the twenty items that actually earn your money, that safety is worth paying a little for.
A wider range, and a way to test. A second supplier is how new lines get into your shop without a big commitment. Take a small quantity, see if it moves, and you have learned something cheaply instead of adding to the stock that sits there and never sells.
Nobody assumes you are captive. A supplier who knows you have a second option prices differently from one who knows you do not. You do not have to say anything. He can see the size of your orders.
What several suppliers cost you
Smaller volume, weaker terms, everywhere. Split across four, you are a small buyer to all four. Worse rates, thinner credit, and no priority when goods are scarce, all at once.
Four accounts instead of one. This is the cost shopkeepers underestimate most, because it is not paid in money. It is paid in bills to check, dates to remember, and the specific mistake of paying a man who was already paid. A shop with four supplier accounts and no records is a shop with four ongoing disagreements waiting to happen. Wasoolo keeps each supplier as his own account with his own balance and history, which is the minimum you need before spreading your buying is even safe.
More delivery days and more counting. Every extra supplier is another arrival to receive, another set of goods to count against a bill, another chance for a short delivery to go unnoticed.
Loyalty stops meaning anything. When trade is tight, favours go to the shop that has been steady. If you have four suppliers and none of them thinks of you as theirs, nobody puts you first.
The shape most shops end up with
The honest answer for a small shop is not one or several. It is a shape.
One main supplier for the goods that make your money. The twenty or thirty items that carry your shop go to the man who gives you the best combination of rate, credit and reliability. He gets enough volume to care, and you get terms worth having.
A second, real supplier for the same goods. Not a name in your phone, a supplier you actually buy from. Small orders, regularly, so the relationship is alive on the day you need it. Think of it as the cost of insurance, and it is a very cheap one.
Specialists for everything else. Some lines only come from one place anyway, and that is fine. A supplier you use twice a year for one category does not need to be part of this calculation at all.
Two live relationships is usually the sweet spot for a small shop. It is enough to keep the rate honest and the shelf full, and few enough that you can genuinely keep both accounts straight. Four is where most shopkeepers start losing track, and losing track is more expensive than any rate difference.
Moving to that shape does not need a dramatic conversation. Shift one category at a time, starting with something that is not your main earner, and let the new supplier prove himself on goods you can afford to be wrong about. Keep your existing orders steady while you do it, because a supplier notices a sudden drop long before he notices a small one, and you want the change to look like ordinary trade rather than a warning. Six months of quiet movement gets you there with both relationships intact.
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How to judge a supplier in three months
You do not need years to know. You need one season and a little attention, because suppliers reveal themselves quickly.
What one season tells you about a supplier
- He said Thursday. Did the goods come on Thursday?
- Every delivery counted against the bill, without a short carton
- The first mistake: how he handled it, not whether it happened
- Your five biggest items, priced today and again in three months
- A small order in a hurry: did he treat it like a real order?
- Slow goods going back, without a two-week argument
Watch the gap between what he says and what happens. A supplier who says Thursday and comes Thursday is worth more than one who says Tuesday and comes Friday, even at a slightly better rate, because you can plan around the first man and cannot plan around the second.
Watch what he does when something goes wrong, because something always does. A short delivery, a damaged carton, a rate that changed without warning. How he handles the first mistake tells you more about the next three years than his opening rate does.
Watch whether his rate creeps. Note what you paid for your five biggest items today and look at the same five in three months. Small increases are normal, and pretending otherwise will just annoy him. What you are looking for is a pattern of quiet increases on the items he knows you cannot easily source elsewhere.
And watch what happens when you place a small order. Some suppliers only respect volume. That is worth knowing before you become dependent on one, because the day you need one carton in a hurry is exactly the day you find out.
Where this shows up in your prices
One last thing, and it is the reason any of this matters.
Your buying terms decide your selling room. A shop that buys well can hold a fair rate and still earn. A shop that buys badly is squeezed from both ends: it cannot go lower without losing money, and it cannot go higher without losing customers.
So keep the buy rate visible next to the sell rate on the goods that matter. That is the number that tells you whether a supplier relationship is actually working, and it is the same number you need before you can set your prices with any confidence. A supplier who feels friendly and prices badly is a friendship you are paying for monthly.
And review the whole arrangement once a year, on a fixed date, whether or not anything feels wrong. Not to threaten anybody. Just to look, honestly, at what each relationship is giving you now rather than what it gave you in the year you started.
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Common questions
My supplier has given me credit for years. Will he be offended if I start buying elsewhere too?
Not if you are open about it and your payments stay clean. Suppliers deal with shops that buy in two places every day of the week. What actually damages the relationship is going quiet, paying late, and then being discovered. Keep his orders steady, keep paying on the agreed day, and a second supplier is simply normal trade.
How do I find out whether my rate is fair without switching?
Buy one line from somebody else, in a small quantity, and compare the landed cost rather than the sticker rate. Include delivery, credit days and what happens to unsold goods. Ask a shopkeeper in a different area, not your neighbour, because he has no reason to mislead you. One honest comparison a year is usually enough to keep everything sensible.
One supplier gives a better rate but no credit. Which do I take?
Work out what the credit is worth to you before you decide, because for a shop that is short of cash it is often worth more than the rate. Money that stays in your hands for thirty days is money that buys other stock, meets a bill, or covers a slow week. Take the cash rate only if you genuinely have the cash and a better use for the discount.
I keep losing track of what I owe each supplier. Where do I start?
One account per supplier, and every bill written the day it arrives rather than the day you pay it. Then a fixed payment day for each. Most confusion in supplier accounts is not caused by the number of suppliers, it is caused by bills being recorded at the moment of payment, which leaves you blind to everything not yet paid.
Should I tell a supplier that somebody else is cheaper?
Only if it is true, and say it as information rather than a threat. "I can get this at Rs 940, is there anything you can do?" is a normal trade conversation and most suppliers answer it. Making it a threat invites him to call it, and if you were not actually going to move, you have just weakened your own position for nothing.
My second supplier is only for emergencies. Is that enough?
Usually not. A supplier you never buy from will treat you as a stranger on the one day you need him most, which is also the day everybody else needs him. Give him a small, regular order, even something you could easily buy elsewhere. It is the cheapest insurance in the whole business, and it keeps a live rate in front of you all year.