How to vet a new supplier

Should i use that supplier ?

Few things to consider before you decide to using a new supply channel

1. Financial background

Of course the ability of giving you credit is important, however when you facing a new trader /supplier, always check their

– Share Capital

– Paid up Capital

– Financial asset ( do they own any fixed asset, e.g. ships, barges, office building etc)

Of course it doesn’t means the supplier who got the most asset / cash is non-breakable but just the chances of they just buzz out is way lesser than a no asset one man band trading house working in his mom’s basement.

2. Social circle checking

Check with other owner, trader, what is the experience of using that supplier ? hows their service ? how do they handle when problem arises ? Do they hear any rumor regarding the new supplier ?

3. Operational support

Its huge different if you fix with a supplier with 1 barge and 11 barges, who will cater better for your ETA change ? especially in busy port like Singapore / Fujairah  / Hong Kong, the waiting time for small barge supplier can be HUGE. The calculation between saving few USD per MT and the potential waiting time is definitely a consideration factor.

Do the people who working direct with you know what is he talking about ? Can he answer your technical/ commercial / operation concern ?

Above are also my decision making process whenever i am considering a new supplier in my list, hope you find it helpful

Until next time !

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