June July 2018

What does it mean to broaden a supplier base? • Beth Gulley: We buy through a lot of broker representatives, so broadening that base partly means you are spreading out all those pieces of the pie to different broker organizations. It also means finding more vendors who can supply unique products. • Bob Gallatin: Broadening a supplier base has two main purposes: ensuring a supply of existing products and bringing in new items. With a broadened supplier base, you will have more suppliers for the items currently being purchased, and you can bring new items into the business, adding different lines of products, to add appeal and increase interest for customers. Why is it a good idea to broaden your supplier base? •  Gulley: You can get more competitive pricing, or different payment terms, which help get you through the season. Freight is becoming another issue; certain suppliers have lower freight rates, which can benefit you. For us, broadening our supplier base is mostly about obtaining a good product mix and ensuring high quality. The more suppliers you have, the more unique your mix of products can be. Some suppliers have specialties such as topiary lavender or other niche products. Others have exclusive varieties or access to exclusive varieties. If we are unhappy with a supplier because the quality is getting worse, we know it’s time to look for a new supplier. • Gallatin: First and foremost, what a company needs to do is make sure it has a continuous supply of products for customers. If you rely on one source, sometimes that one source may have a problem, which can have a significant impact on your business. Particularly in a business very impacted by seasons, like a nursery, if you have trouble during your critical time of year, it can be devastating. Also, a current supplier may not be able to supply new items that will drive more traffic to your business. Broadening your supplier base brings opportunities to expand your product line with unique and high quality options. Current suppliers should not become complacent. You should be able to rely on them for marketing and product ideas. Sometimes new suppliers can bring in new ideas as well as keep old suppliers on their toes. Having two suppliers helps you stay aggressive in pricing, as you can get quotes from two different companies. But, you need to understand the price and whether it is competitive for the quality you are looking for. Quality is uppermost for green industry businesses; it doesn’t take much to turn off clients if plants are not high quality. Is it wise to have more than one supplier for each product? •  Gulley: It’s definitely good to have a backup. A lot of times, especially for our young plants program, we make it a requirement to have two sources. If one supplier drops the ball, we can still keep that line item as part of the program through another supplier. • Gallatin: As your business grows, can current suppliers supply your needs? Having a backup, second supplier ensures that there is no interruption in supply. That doesn’t mean splitting all product orders 50/50. Maybe a second supplier doesn’t supply the full line but only certain products on a regular basis, with the ability to supply the full line if needed. Is selecting companies from different locations a good way to broaden a supplier base? •  Gulley: For greenhouse products, having suppliers in different locations is not as critical. Even if suppliers are in the same area or state, they will not likely be impacted by pests or viruses at another supplier. While it’s important to have multiple suppliers of a variety in case of a crop contamination at one, a nearby supplier should be fine. On the nursery side, the actual physical location could be important, when suppliers are dealing with drought and pests, so selecting suppliers from at least two different states or regions may be helpful. In either case, picking different suppliers based on location can help 10 colorad o nga.org LooseLeaf June/July 2018 BROADENIN YOUR SUPPLIER BASE Q & A with Fort Collins, Colorado-based Gulley Greenhouse Sales & Purchasing Manager Beth Gulley and SCORE Santa Fe & Northern New Mexico Chapter Chair Bob Gallatin