A supplier can be defined as a person or organization that provides a product or service to a vendor. Most all organizations use suppliers to provide goods and/or services to them. Though most do it, it must be done with caution, as there is a plethora of potential risks involved with using a third-party supplier. Following are five of the most common supplier risks.
There is a great deal of financial supplier risks involved with using a third-party supplier. If your supplier is overseas, then you might concern yourself with fluctuating foreign exchange rates. Regardless of where your supplier is located, you should be mindful of potential bankruptcies, tax changes, market changes and price changes. Of course, there is always the risk of financial loss if a supplier does not meet expectations.
Sometimes things happen that can prevent a supplier from delivering a good or product. Delivery supplier risks include natural disasters, government or economic issues and terrorist attacks, just to name a few. Unfortunately, these risks can’t be predicted or avoided, but it is wise to be prepared in case they do occur.