Definition of Suppliers, Function, Duties, and Methods

Suppliers in Mexico City
Image by Joaquin Alcaraz | Unsplash

Supplier is a term that is often used in the business world. Supplier is a term that concerns business turnover.

Businessmen and businesses will try to find the best suppliers so that their businesses can run smoothly.

So, who is a supplier or who are suppliers, what are their functions and duties, and what are some examples?

Let’s explore everything about them below:

Who are the suppliers?

Suppliers are parties, both individuals and companies, who sell or supply raw materials to other parties, specifically to producers.

This means that suppliers only sell raw materials to producers, who then process them to finally produce products that are ready for use.

From the explanation above, it certainly shows how important the existence of suppliers is.

To make it easier to understand, below is an explanation of the supplier’s function in the business world.

Functions of Suppliers

Suppliers, or what are also usually called vendors, have a number of important functions.

This function will show their position as the driving force of the business.

1. Resource Provider for Manufacturers

As mentioned previously, a supplier means a provider of raw materials, which are the resources needed by producers.

The raw materials provided by them are later processed and produce finished products for consumers use.

2. Drive the Production Cycle

Thanks to the resources supplied by suppliers, the production cycle can run smoothly.

The existence of supplier or suppliers also determines whether the production process can run smoothly or not.

Without raw materials, the production process will certainly be hampered or even impossible.

3. Determinants of Final Products Quality

Not only in the process, product quality is also influenced by the quality of raw materials.

Because the supplier is the provider of these materials, the quality production results is also determined by the quality of the raw materials they supply.

What Are the Duties of Suppliers

Supplier means the supplier of raw materials.

From this understanding, their duties are quite clear, right?

To be more clearer, the duties of suppliers are as follows:

1. Ensure That Raw Material Supplies Are Available

Being a supplier means being a “supporter” for producers who need raw materials.

If there are not enough raw materials to be processed, of course the production process will be disrupted.

For this reason, the main task for a supplier is to ensure that the required raw materials are available and sufficient for producers.

2. Provide Qualitative Raw Materials

Apart from ensuring the availability of raw materials, another task of the supplier is to ensure the quality of the raw materials is top-notch.

As the initial chain of the production cycle, product quality depends on the raw materials provided by suppliers.

3. Manage Raw Material Storage

Suppliers must also manage inventory or storage of raw material supplies so that the condition and quality of raw materials remain guaranteed until they reach the buyer.

4. Arrange Shipping

Ensuring supplies reach buyers in safe conditions and on time is also the supplier’s job.

Because suppliers are part of the business chain, poor-quality raw materials or arriving late will greatly affect the next process, namely the production process.

How Suppliers Work

If you have a source or supply of raw materials needed in your business, becoming a supplier is an opportunity that should not be missed.

One of the most important things you need to understand is the task and how it works.

The way suppliers work is as follows:

1. Procure Raw Materials

The first thing you must do as a supplier is procure raw materials.

This process starts with determining the budget and the production stages.

For example, if you are a supplier of raw crackers, you have to search for, determine a budget, and manage raw materials such as cassava, eggs, salt, and others so that they become raw crackers that are ready to be sold.

2. Include Raw Material Information

Information about the raw materials you make also needs to be included so that buyers know what ingredients are contained in them.

For example, do the raw crackers you make contain shrimp or fish?

3. Marketing Raw Materials

If the raw materials are available, the next thing the supplier does is market the raw materials.

You can market it offline, such as at markets, supermarkets, or at certain events.

Also Read: How to Create Unique Business Brand in 12 Ways

You can also use digital media to market these raw materials, for example, through online marketplaces, websites, and social media.

4. Attracting Businessmen and businesses

If you want your business to run smoothly, try to collaborate with other businessmen or businesses.

No doubt, you need the right business partner if you want your business to continue to grow and exist in the long term.

Types and Examples of Suppliers

There are several types of suppliers when viewed based on the value or characteristics of their products, namely:

1. Goods products

Goods suppliers usually provide raw materials for manufactured products.

For example, cassava suppliers for chip manufacturers or rubber suppliers for plastic manufacturers.

2. Service products

This type of supplier is a supplier of raw materials whose final result is a service product.

For example, rubber is needed for polybags creation.

3. Fabrication materials

The next type is a fabrication material supplier.

Existing raw materials are processed first according to the needs of the target market. For example, rice paper for food vendors.

4. No fabricated Materials

If the previous type had prior processing, then this type of supplier directly supplies raw materials without processing them first.

For example, sugar cane, coffee beans, and the like.

Why Should Companies Find the Right Supplier?

From the roles and everything explained above, perhaps you already understand that suppliers play an important role in business.

Without suppliers, the production cycle cannot run as it should.

This is also the reason why companies need to work with the right suppliers.

Finding the right supplier means that the company or producer can save costs and time because the raw materials obtained are not the result of “trial and error” but are in accordance with the needs or desired criteria.

If you have found the right supplier, the company no longer needs to look for a comparison supplier, which, of course, takes time and money.

Apart from that, working with the right supplier can also encourage product development.

When the raw materials obtained are of high quality and potential, companies can innovate to develop their products.

Lastly, by finding the right supplier, the company’s customer experience will also be much better, thanks to the very satisfying products produced.

Want to become a supplier?

Please further your reading below:

How to Get Started as a Supplier

After knowing information about what a supplier is and how it works and functions, are you interested in taking on the role of supplier?

With quite tempting profit opportunities, the way to start becoming a supplier is as follows:

1. Has a USP (unique selling point)

USP is the uniqueness that differentiates your business from competitors in the same niche.

You must know what advantages your business has compared to other competitors.

For example, you are able to provide raw materials in very large quantities, but in a short time, the raw materials provided are difficult to find on the market, and so on.

2. Determine the Target Market

Apart from having advantages or uniqueness regarding the raw materials you want to sell, you also need to identify and determine the target market so that you can focus more on reaching potential customers, including determining raw material specifications and choosing a marketing strategy.

3. Actively Participate in Offline Events

For the public to know your product better, you may need to carry out various branding efforts, for example, by conducting outreach.

You can introduce products through offline events related to your market niche.

For example, attending a food exhibition and others.

4. Introduce Products Online

You can take advantage of digital technology to further expand the market for your product.

For example, promoting and marketing it through online marketplaces, creating company website and e-commerce section, and social media.

Conclusion

It can be said that suppliers are the key to all kinds of businesses.

Whether large, medium, or small, all businesses need suppliers for raw materials for their products.

A supplier is a role that will always be needed.

All production lines certainly need suppliers of raw materials, whether in the form of goods or services.

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