The exact criteria involved in evaluating a vendor will vary depending on the needs of the business.
Sometimes known as vendor screening, vendor screening is an approach used by companies to determine if a particular vendor is a good candidate for an ongoing employment relationship. The idea behind the evaluation is to ensure that the vendor is financially stable, capable of providing the quantity of goods or services needed, and able to provide an acceptable level of service and support. The price offered by the provider is often a key component in the evaluation of the provider.
While the exact criteria involved in vendor evaluation will vary based on business needs, there are several basic factors that are likely to be considered. Some of these factors will focus on general information about the provider that helps inform the potential customer more about the provider’s operation. Questions about the number of locations operated by the provider, a general idea of how large the employee workforce is, and the provider’s annual revenue help establish that the provider is established and has managed to build a presence in the business community.
Along with the basics, the vendor assessment will delve a little deeper into the vendor’s policies and procedures. Here, the goal is to determine if the supplier can provide goods or services at volume levels that meet the customer’s needs. For example, a large company looking for a teleconferencing provider might ask about the number of connections that can be made in a single conference call and whether the company has the capacity to handle a large influx of company-wide teleconferences at specific times. of the year. workweek. Similarly, a textile manufacturer may want to ensure that the supplier can supply a certain quantity of raw materials on a certain day of the week without fail.
The vendor assessment will also often include some attention to the vendor’s ability to respond effectively in the event of a sudden increase in the need for goods and services. Discussions about how much time it would take for the vendor to take action to respond to emergency situations and how requests for those needs can be expedited are often important to potential customers. Similarly, questions about customer service, whether on a routine basis or in an emergency situation, are also often part of the evaluation.
As with many types of business reviews, price is also an important consideration in any vendor review. The potential customer will want to know if the supplier can not only meet their needs, but will also provide those goods and services at a competitive price. Assuming that the products, level of service and support, and price are attractive enough to continue discussions, the customer may be willing to accept a proposal from the vendor and eventually opt to enter into a win-win contract.