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“Apple announced on June 8 that it would launch its own streaming music service…. But its launch would come with three free trial months of service—months during which it would not compensate labels for the music it streamed.”
Once Taylor Swift protested that she was not going to be paid royalties during the three-month trial period, Apple backed down and agreed to pay the fees. Taylor Swift is not only a big draw to users of the music service- she also has influence over other artists. The supplier (Taylor Swift) is driving the business (streaming music service).
In the case of Taylor Swift, the customer demand for the product outweighs the price paid for the product (royalties). In other instances, you may determine that more than one supplier can provide the product to you.
A common mistake in business is to “chase” the supplier who offers a cheaper price. There are other considerations besides price:
· Quality: If the product has defects, it will slow a manufacturer’s production process. If you’re a retailer, you don’t want to sell a defective product that you stock in inventory.
· Timing: As mentioned above, a supplier must be able to ship you product when you need it. If not, you may lose business. Paying 10% less doesn’t do you any good if the product is shipped late.
· Variety of Product: A big issue for many businesses is using too many suppliers. One way to address this issue is to find suppliers that offer many of the products you need- one stop shopping for you. If your supplier can meet this requirement, you might be willing to pay more.
Consider all of these factors when looking for suppliers. Meeting the needs to your customers is about more than just price. By using these tips, you can meet your client’s needs and grow your business.
Have you dealt with a difficult supplier situation? I’d love to hear from you.
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