Are you satisfied with your current vendors – or were you disappointed by a recent order and looking to make a change? In this article, we discuss the criteria for evaluating vendors – particularly vendors of hard goods. At Roonga, we use these criteria to evaluate our own vendor partners, so they reflect our philosophies and priorities. Please tweak to fit your organization’s own priorities. We have developed a hands-on Roonga Vendor Evaluation Worksheet that you can use for your own evaluations.
When we are executing a vendor evaluation, we typically follow a process like this (we may skip some of these steps for simpler evaluations):
- Identify long list of potential vendors in the product area (5+ vendors if possible).
- Conduct pre-research (review vendor website, search for articles about the vendor, review vendor’s social media pages, check Dun & Bradstreet for credit rating, and small business bureau for customer complaints).
- Reduce to short list of 2-3 vendors.
- Contact and interview vendors.
- Request and contact customer referrals.
- Make a decision.
While conducting the initial pre-research (step 2) and the more detailed research (steps 4 and 5), we create a rubric to capture the information collected and compare the vendors. For us, this rubric includes the following criteria, listed in priority order:
Key Evaluation Criteria (Required)
- Reliability: How reliable is the vendor at delivering goods on time? When there are issues, how effective is their followup and communication? You may not be able to evaluate this fully in your initial discussion – make sure to ask about this in your customer referral calls or by evaluating how quickly they are to respond during the evluation process.
- Cultural Fit: This is definitely a “soft” criteria, but it is one of those factors that really improves the effectiveness of a relationship. Some of the factors include the vendor’s prioritization of customer needs and their satisfaction, flexibility in how they work with customers, and in general, how they treat other people and other organizations. Most importantly, how well do you get along with their staff?
- Product Breadth and Quality: Do their products meet your needs? How is the product quality? We listed this criteria third on our list becuase we have found that a vendor can have the best products in the world, but if they don’t arrive on time, it doesn’t matter.
- Product Pricing: Is the pricing competitive and reasonable for the quality and types of products offered? Does the pricing meet your budgetary requirements? It is important to note that the lowest cost is not always the best.
- Financial Stability: How long has this vendor been in business? Are they financially stable? Do they appear like they will be around for a while? It can be difficult to evaluate this criteria, but we put this on the list and placed it last (least important). There are new vendors may still be great to work with, so longevity is not necessarily a must-have.
Secondary Criteria (Highly Desired)
- Social Mission Fit: Do they share our mission to help low income people and the homeless? We enjoy working with partners who share our mission and are interested in helping the communities around us.
- Experience Working with Nonprofits: Previous experience selling and working with nonprofits is desired but not required.
We have created a Roonga Vendor Evaluation Worksheet that you are welcome to use for your own vendor evaluations.
One last thought regarding vendor evaluations… We believe strongly that our vendors are also partners. A true partnership means that each side is invested in each other’s success. Sharing similar goals and values makes it easier to address the potential order problems that can come along. Not every order or relationship will be perfect – even Amazon has issues from time to time. What’s important to us is how these issues are resolved and whether the result is equitable for all parties involved.
Good luck as you embark on your own evaluations – and feel free to reach out at firstname.lastname@example.org if you have any questions, thoughts, or issues.
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