Month: March 2020

Supplier relationship management (SRM) is one aspect of business that your company should have in place. As a business, you may be working with a handful of suppliers that provide you with raw materials or certain items. As much as possible, you have to establish good relationships with them, which can benefit you along the way. 

Unfortunately, it’s easy for some companies to take their supplier management for granted. Naturally, their utmost focus is on establishing good relationships with customers only. What many fail to realise is how building great connections with suppliers can be impactful to their business as well.

That said, here are four benefits that you can take advantage of having solid relationships with your suppliers.

1. Quality materials and timely delivery

If you want to make a dent in attracting customers and have high returns, there are two aspects you shouldn’t neglect—the quality of your products and the turn-around-time of delivery. These two factors can be impacted significantly if your suppliers fail to do the needful. As much as possible, they have to provide you with the raw supplies on time, and these materials should be of good quality. If you build good connections with these suppliers, not only will they prioritise your goods, but they will also provide you with superior materials.

2. Seamless production

In line with getting quality materials on time, it’s easy for your production phase to kick off. If there are delays in the delivery of your needed supplies, your business operation can have downtime, which can severely affect your overall production. When you set out to establish good relationships with your supplier, you won’t have to experience all these delays and challenges. Your business will always have a smooth operation and overall production.

3. Customer satisfaction

With timely delivery of supplies and seamless production, what can you expect from your products and services? You can expect quality products and timely delivery of services as well. What does this mean to your customers? They will be happy campers as well, knowing that your business does deliver way above and beyond. You will be known as a company that values customer satisfaction. The supply may just be the initial step of your process, but it can have a ripple effect on your overall business success.

4. Help and support

What’s good about having solid relationships with your suppliers is the utmost support. Both parties no longer see each other as clients that need something from each other. You both realise that you are business partners and that your relationships with each other are crucial to each other’s success. Should there be challenges and problems along the way, you’ll be providing help and support for each other.

Conclusion

Many businesses tend to neglect supplier management. Know, however, that a good relationship with your suppliers is just as important as fostering good relationships with your customers. As outlined above, many benefits come from having solid relationships with your suppliers. All these valuable merits can contribute to the overall success of your business.

We specialise in online commodities, raw materials, and industrial supplies. If you are looking to have trusted suppliers and build good relationships with them, contact us today to see how we can help!

When we talk about commodities, we think of goods or products that we need in our day-to-day life. These products can be categorised into two: hard and soft commodities. While hard commodities refer to products provided by our natural resources such as oil and metals, soft commodities are flexible products such as livestock and agricultural goods.

But the question is, how do we go about procuring these goods or products? In the past, we resorted to commodity trading by exchanging stuff such as spices, fruits, vegetables, and livestock. Today, we trade commodities through the use of money. That is where the commodity market comes into the picture.

The commodity market allows us to trade vital things such as precious metals, energy, oil, spices, and livestock, among others. These products can be accessed through traditional holdings, contracts, exchange-traded funds (ETF), and associated markets.

In this blog, we’ll cover the five benefits of a commodity market. Keep on reading to learn more!

Improvement in product quality

The commodity market aims to improve the quality of products being traded. This goal is achieved through the existence of warehouses with grading facilities. The standardisation of commodity trade is set in place to ensure quality products, and along with this is the certification issued by the exchange-certified warehouses.

Price discovery

The commodity market allows easy discovery of prices. Pricing is set based on the data and information on specific markets, the demand and supply balance, weather forecasts, government policies, environmental factors, and the position of buyers and sellers making product exchanges. The goal is to set a fair value of price per commodity for proper trade execution.

Hedging

Price risk management is vital to the overall equation in the commodity market. For the most part, risk management is attained through the most common method known as hedging. This strategy takes an equal but opposite position in the futures market to protect businesses from an adverse price change. This particularly benefits farmers, processors, merchandisers, manufacturers, exporters, importers, and more.

Competitiveness in export

The commodity market ensures competition in exporting products. For one, exporters can hedge their price risk and improve their competitiveness through the futures market. This market allows exporters to hedge their proposed purchase by temporarily substituting for the actual purchase. Without it, the commodity market will have time-consuming and expensive physical transactions.

Accessibility to credits

What’s good about the commodity market is how it allows businesses to have access to credit. Easy credit accessibility has brought financial institutions’ confidence in proper risk management set in the commodity market. Without risk management, marketing and processing commodities can be a risky business activity to fund. Through proper regulation and full compliance, banks will be more confident than ever in funding commodity-trading companies.

Conclusion

There are valuable reasons the commodity market exists. As shown above, the commodity market ensures product quality, price discovery, pricing management, export competitiveness, and credit accessibility.

Ultimately, proper trading implementation, regulation, and compliance are set in place for the good of the participating businesses and the entire commodity market.

We specialise in online commodities, raw materials, and industrial supplies. If you are looking to optimise your supply chain in the commodity market, contact us today to see how we can help!

Business owners deal a lot with their suppliers. Suppliers are a part of a business’s success, which is why it’s essential to establish good relationships with them. When you find reliable suppliers, you need to take care of them. 

But first, let’s talk about how suppliers impact your business. 

Suppliers Impact the Quality of Your Products or Services

Whether it’s a machine part, a basketful of ingredients, or a sack of garments, what your supplier brings to you will have a considerable effect on the quality of your products and services. Therefore, you need to seek a reliable supplier. 

Suppliers Affect Your Timeliness

If a supplier fails to deliver on time, it would have a domino effect on your business operations. You will be late on your deliveries as well. A supplier that provides a quick turnaround is one of the primary keys to minimise your inventory and to ensure that your clients’ needs are met on time. 

Suppliers Can Contribute to Your Product Developments

Are you developing a new product? Whatever product idea you may have, your suppliers have a significant contribution to it. 

These are some of the reasons suppliers play a significant role in businesses today. That is why you need to take the time and effort to build good relationships with your suppliers because they will be working alongside you.

Fostering Good Relationships With Suppliers

Here are some tips to help you cultivate good relationships with your suppliers: 

• Talk to them

If you only talk to your suppliers regarding business, then it’s time to change that. You need to reach out to your suppliers even if there’s no business involved. A simple “How are you?” or sending them some delicious pastries can go a long way relationship-wise. 

• View them as partners

Business owners tend to look at suppliers as vendors, which sets a perspective that hinders a potential relationship. It helps to consider suppliers as partners that you work with, as this mindset will help you optimise relationships.

• Share product forecasts with vendors

There are times when businesses fail to share their product forecasts with their suppliers. It then leaves suppliers in the dark. By sharing your product forecasts with your suppliers, you both get on the same page when it comes to the volume of commodities that you need over the next phase. 

• Always be honest

Honesty can do wonders for your relationships with suppliers. Should something go wrong, a business should easily reach out to the supplier and explain the situation. For example, if the quality of the merchandise is lower than expected, a business owner should not sweep this issue under the rug. They need to be upfront about it to their supplier. 

Conclusion

Suppliers play a significant role in your business operations, so make sure not to neglect them. Strive to find the best suppliers in your industry, and once you do, keep them by working on building good relationships for the long term. 

If you’re looking for suitable suppliers for your commodities, it’s easy to find one today, thanks to the wonders of the internet. Check out BLK Global today.

The commodity market is a marketplace where people trade all sorts of different things, mainly raw or primary products, such as wheat, oil, and gold. While the definition we’ve given you applies to all commodity markets, do note that they’re not trading the same things. 

How Commodity Markets Work

Prices in commodity markets are dependent on many factors, such as supply, costs to collect those items, and so on. Generally, it works like any other market, where people come to buy, sell, or trade.

One defining aspect of the commodity market, however, is that a buyer is given the ability to set a future price of a commodity, securing it in the present time. In other words, the buyer can secure a futures contract. For example, if an individual wants to purchase wheat at a specific price in the near future, he or she will pay that exact price no matter what when the seller delivers. It means that, whether the general cost of wheat rises or falls, the buyer is not necessarily affected by it after the agreed contract.

If you wanted to purchase a commodity like oil, you can set the price now on how much oil you want and when, and if both parties agree, you will pay the amount you specified when you receive it at a later date. Whether there is an ongoing economic event, forcing products to either shoot tremendously low or high, you’ll still pay the same amount on delivery date.

The Types of Commodity

While different commodity markets might be selling various commodities, they can all be placed either under these two categories: soft commodities and hard commodities.

Soft commodities are commodities that are usually unlimited and are not affected by factors relating to international politics that are usually influenced by geographical factors. Instead, the prices they come in are affected by the given conditions of the environment, such as weather or any other natural events. Soft commodities, then, include products relating to agriculture, such as barley, wheat, rice, and the likes. They also include livestock like chicken, pork, and beef.

On the other hand, hard commodities are limited in reserves and are affected by geopolitical factors. It means that, when there is an economic crisis or boom ongoing in the world’s general economics, the prices of these products will be affected profoundly. These products are also taken from the environment, utilising different procedures like mining, which, along with geopolitics, also affect the prices of these products. Out of these processes come the products, such as copper, rubber, gold, and oil.

Final Thoughts

Commodities are similar to other assets like bonds. The differentiating factor for commodities, then, is the fact that they’re tangible. That said, commodity markets are places where buyers and sellers can come together to buy, sell, and trade different products. At the same time, these markets give buyers and sellers the chance to set the pricing of the commodities.

If you’re looking to purchase commodities online in the UK, get in touch with us to see how we can help.