Should you split your business or use one supplier?
As a company, you just want things to run smoothly. You want to know you’re getting reliability, good service and ultimately, a good deal for what you’re paying for.
If you’re getting late deliveries and noticing product order costs are going up despite being cheaper elsewhere, it’s going to rankle you.
You start to get the feeling that you’re being treated like just another number instead of a human being. No one likes being treated as a number instead of a customer. If this sounds relatable to you, then it may be time for a supplier switch.
However, it isn’t always as simple as that. It is also one of the reasons why some split their business among multiple suppliers, rather than just using one.
Even with bad service, some would rather stick with a company in some capacity as it’s a lot less hassle than making a change, as opposed to cutting ties.
Which is best for you, though? Is it better to put all your eggs in one basket with one company, or play the field and use several?
One way to come to a decision is by trialling a supplier first. That way, you stick with your existing supplier in the short term, but can test the waters with another and then decide whether to split or switch.
While we can’t (and won’t) directly tell you and your company what to do, we can outline the pros and cons of both scenarios, so you can make a more informed decision.
Ultimately, we want what is best for you and your company and as such, we are going to explore both options in this article for you.
What are the pros of splitting your business?
In some ways, you arguably have more power when you split your business. It’s the same when doing a food shop and you go to different supermarkets; some will have items cheaper than others, so you use all of them to get the best price.
You also aren’t stuck if something goes wrong. If you need something the next day for example and one company can’t do it, there’s a good chance you’ll find one who can.
This also extends to product quality or preference. You may prefer a certain type of product that one company does over another, so you aren’t restricted as to what you can or can’t get.
Following on from that, there may be a product that one company stocks that another doesn’t. Keeping your options open means you won’t have to settle for less.
What about the pros of staying with one company?
In terms of ease, having one company is definitely simpler than juggling several. If you only have one company to order from, that saves time than ordering with many.
As such, it can be more efficient to just have one. You will also have much better relationships with the one supplier, as over time, your business will be valued and appreciated.
It also stops you trying to spin a lot of plates. Rather than try and manage relationships with multiple suppliers, you can focus on gaining the most from one.
In fact, this can work in your favour as if you are a long-term customer, you’re likely to get preferential treatment compared to a new customer.
This can even extend to having better support and even discounts. That is something we do at Multifix, with a policy that the more you spend, the better the rewards for you.
What cons are there for splitting your business?
The main con is the amount of extra admin to juggle. More suppliers means more relationships and that means more effort. It means multiple invoices, as well as different systems to navigate.
This in itself is an issue. According to research from Gartner, the average UK cost of processing an invoice ranges between £4 and £25. In some instances, if errors are made, it can be up to £50 per invoice.
Also, while you may be sniping for all the cheapest prices, that can actually work against you. As an example, let’s say you make three orders from three companies because they have the cheapest prices.
That’s great, but if it’s under the minimum delivery cost for each, you’ll end up paying more. It could be cheaper to buy it all with one and get free delivery than split it all among several and pay added costs.
Finally, you’ll always likely be treated as a number with multiple suppliers. Because you won’t be using them exclusively, you’re likely to miss out on the best rates and the best level of service.
As such, you also won’t have much of an opportunity to strike long-lasting relationships. Your business will still be appreciated, of course, but they’ll see it as having little reason to give you special treatment.
And the cons of using only one supplier?
The main con of only using one supplier is that you potentially run the risk of being taken for granted. You might find you’re not getting discounts or improved service despite your loyalty, which can be hugely frustrating.
Likewise, they may become complacent with you on other things. Say a delivery is a day late, they may take the approach of, “oh it’s only so and so, that’s alright.” Naturally, you don’t want this.
If something happens with that company as well, whether it's a logistical disruption or financially related, you’re a bit stuck. At least with other suppliers, you can navigate this, but with one, it’s difficult.
Lastly, you might be missing out on better products elsewhere. The company you’re solely using might have a good alternative, but if they don’t stock exactly what you want, that can be challenging.
So, what’s best for me?
Ultimately, that’s only a question you can answer. As we said at the start of the article, we won’t tell you what to do with your business.
What we will say though, is if you are using one supplier and you aren’t getting the benefits listed, you should definitely consider finding a new one.
No one wants to be taken for granted and everyone wants the best offers, so it’s important you get the maximum from your supplier.
If you would like to open a dialogue on how Multifix can help you, as either a sole supplier or as another one for you to use, you can contact us here.