All business men know the simple truth that “PROFIT comes from BUYING, NOT from SELLING”. Thus, choosing a good supplier is a key to protect his/her business results in the end of a period.
There are 7 key traits every buyer should consider to choose a good supplier, especially in ETHANOL business.
1. Origin of ethanol: For ethanol business, it is a key element to do as first step. In some countries, they control suppliers by raising tariff to 300% for any country not signing trade agreement. For example: If ethanol origin is from Vietnam, it is impossible to sell in Europe until now, 2016. I say now because it is on the process of lower tariff for ethanol HS code 2207 between Vietnam and EU. So if you are A French buyer, you should not contact a Vietnamese supplier. Waste your time.
2. Distance: Ethanol is a low value product with special care. Hence, they are commonly delivered by sea transportation in HDPE 220L drum or isotank 24,000L to save logistic cost. They are not allowed to be delivered by air or LCL ('Less than Container Load). Please imagine each drum of ethanol is considered as a bomb because of its easy to be flammable. No one wants to put it on the airplane. So please try to find suppliers around your country from 1-5 flight hours. For example, if you are a Chinese buyer, you should find supplier around your country like Korea, Japan, Vietnam, Taiwan, Hong kong, Thailand, Indonesia, Malaysia… Please don’t come to Chile to find ethanol suppliers.
3. Years of experiences: Ethanol is food grade flammable dangerous goods. You need to know how many years such supplier has been doing in this field. There is no space for mistake when ethanol is on fire. If you want to choose a supplier like Warren Buffet way, a good number is 10 year experience.
4. Third party certification: 80% ethanol buyers never meet the suppliers. Therefore, it is highly asked they to check if their supplier is certified by a/some reputable organization such as ISO 9001-2015, HACCP. If you do business with Asian suppliers, don’t buy from anyone who is not a gold member of Alibaba because Alibaba has a very strong procedure to check suppliers. The more year as gold member, the better. 5 year above of gold member of Alibaba is always a good choice.
5. Price and quality: Price and quality always go together. Ethanol ENA made from molasses is the best quality because of its good technical quality and light smell. Ethanol made from cassava always has stronger smell, technical quality is worse because IPA (iso propanol is commonly high from 100-200ppm). However, ethanol made from cassava has cheaper price and it is good when you use in industrial use like for hand sanitizer, cleaning machine in pharmaceutical and cosmetic factories. You should need to know which purpose you use for ethanol or quality you would like then the suppliers can give you the best prices and relevant quality. Sometime price is not everything. If you accept a few cents/litre higher in price, you will get better goods services which save you a lot of money to avoid the failure of shipments.
6. English-speaking staff: If they can’t chat and speak English with you fluently, please stay away to avoid troubles. If you have 3 suppliers and both of them speak English well, please see how they communicate with you. If they used to sell ethanol to your country, it is a good mark because they know your local rules and regulation. Ethanol is treated totally hard in Muslim countries and it is asked to move out of the port within 24 hours since the time it comes to port because its danger. Thus, if they are new and don’t make proper documents, you will have headache or cost you a lot of money. A good supplier will give you a shipment schedule clearly how many days since the date of receiving money they will do the loading, which day the container is on board; when they give you draft documents for your final checking. Some good supplier will make pictures and send to you before the date of shipment on board proving that the procedure is made.
7. Open and direct communication: A good supplier is open and direct. They know that you may have made commitments to your own customers, and it doesn’t help to keep you uninformed about a bad situation. If there’s a change to the status quo, they tell you upfront. If they need clarification about your requirements, they ask for it.
It’s not always easy to identify a good supplier immediately. But after some initial communication, you should be able to qualify one by looking for these five traits.
Just because a supplier is convincing and shows you a few amazing product samples doesn’t mean you should overlook how they actually function. These traits will help you sort the good from the bad and help you determine if using a particular supplier is best for your supply chain, your customers and your business.