Points to Remember When Working with Single Supplier

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Some companies do follow the strategy of working with single supplier. Others use the strategy of working with more then one supplier which we might call it Multi Supplier. For instance, many companies in Oman are working in a method that they release a Quotation with a minimum of three applying for the Quotation and they select the best one based on the cost and advantages. Some companies highlight that this is a time consuming. Others would prefer working with single supplier and provide him the opportunity to understand their business better and the culture of the company.

Although they are advantages working with one supplier, they are disadvantages which I would like to highlight in this article.

From strategic point of view, Never put all your eggs in one basket. Do not try working with only one supplier.

1) This is too risky as your business will be limited in only one channel.

2) Missing opportunity of learning and knowledge: by working with one retailer you will miss the opportunity of learning. Different suppliers you are working with will provide you an opportunity to learn.

3) Missing features and quality opportunity: other suppliers might provide you features that you didn't know. Don't miss this opportunity.

4) Your company will have less power to negotiate as times goes your supplier will get stronger and you will become weaker to negotiate.

5) Your business will depend on supplier. If he is good, your business is good. If he is bad, your business will be bad. The kind of products and services the supplier provides will effect your business.

Those are some of the disadvantages of working with one supplier.

Remember those points when you make a strategic decision of working with a single supplier.

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