Vendor Centric Blog

Does it Make Sense to Go Local with Your Vendors?

 

 

Using local vendors has become a big thing in the restaurant world. You can't watch a show on the Food Channel without hearing someone talk about "buying local."


That's because in the restaurant business, buying from local vendors has a number of business and social benefits. Food is fresher as it is delivered from nearby farms (or rivers or oceans or bays). Transportation costs less as there are fewer miles between farm/water and the dinner table. And with fewer miles to drive, there is a much smaller environmental footprint.


But what if you aren't in the food business? Does buying local make sense for you? I say yes…and no. Here's why.


Buying from local vendors has a number of advantages. One is that you can be a bigger fish in a smaller pond. Since local vendors tend to be smaller, your purchases with them are bigger (and more important). Higher importance generally means more attention - oftentimes from the owner - both when things are going well and when they aren't.


Another advantage is that local businesses tend to have a better understanding of the local market because their ultimate success is driven by it. This generally leads to a much greater interest and participation in the local community, and a better handle on where it's been and where it's going.


But there are also challenges to buying from local vendors. The most obvious is price. While local vendors can certainly compete with their larger regional, national and international competitors in the short-term, they generally don't have the cost structure and scalability to maintain those prices in the long run. And if they do try to maintain them, something else generally has to give in terms of quality and/or service.


Another challenge is the ability for local vendors to service different geographic regions, both domestically and internationally. Larger vendors have established distribution systems on a broader scale, and can provide consistent goods, pricing and service levels across multiple geographic areas. They also generally provide a broader array of services and can support more complex needs. Using a single vendor for more complex and geographically disburse needs not only increases buying power, it centralizes quality control and reduces the number of vendor relationships that need to be managed.


I love buying locally, and our company does so deliberately when it makes sense. But we understand that local buying has a place in a broader vendor strategy, and that the best-run organizations have a well-designed portfolio of local, regional and national/international vendors. A good strategy requires organizations to thoughtfully, and deliberately, leverage their entire vendor portfolio to meet both their business and social objectives.
 

 

 

Tom is Founder & CEO of Vendor Centric, a consulting firm that helps organizations adopt a risk-based approach to vendor management.  Connect with Tom on LinkedIn or drop him a note at trogers@vendorcentric.com.

 

Please reload

Subscribe to the

Vendor Centric 

Blog

Subscribe to the

Vendor Centric 

Blog

Our

Publications

Rethinking Vendors

Our flagship publication shares our philosophy on power and untapped value of vendor relationships.

The Nonprofit CFO's Guide to Virtual Credit Cards

 

A step-by-step guide to automating a/p payment processing and creating new streams of revenue.

Subscribe to

Our Podcast

Related Blog Posts

Please reload

Quick Links

Contact Us

9841 Washingtonian Boulevard Suite 200 Gaithersburg, Maryland 20878

 

(240) 813-1170

 

info@vendorcentric.com

Follow Us

  • Vendor Centric Facebook
  • Vendor Centric Twitter
  • Vendor Centric LinkedIn

Subscribe to our newsletter

Subscribe to our

Rethinking Vendors Podcast

Vendor Centric Podcast

Copyright © 2018 Vendor Centric. All rights reserved.