Look Beyond Price For The Best Value

With the United States still weathering one of its worst economic downturns, buyers have a powerful incentive to zero in on price as the primary factor in selecting a supplier for a store brand item. But with any product — whether it's coffee or cleaning supplies — the best price might not mean the best deal for the retailer or the consumer.

An increasing number of shoppers are demanding that store brands also be of high quality and produced in a socially and environmentally responsible manner. That reality means retailers need to ask the right questions of potential suppliers so they are able to choose supplier-partners that are able to deliver on consumer expectations.

Assess eco-commitment

Retailers can demonstrate to consumers that they are environmentally conscious by selecting a supplier with a documented commitment to environmentally responsible production and packaging.

Ask a potential supplier such questions as, "What are you doing to reduce your carbon footprint?" "Are you committed to reducing packaging or producing recyclable or biodegradable packaging?" "What are you doing preserve trees, plants and wildlife in local communities — or those miles away?"

Even if one does not agree that there is any moral imperative to use an environmentally responsible supplier, there are practical and economic considerations for retailers. A host of websites and organizations now provide easily-accessible social, environment and health ratings for consumer products. And saving natural resources, of course, is good for any company's bottom line.

Understand local conditions

When we traveled to Central America three decades ago, conditions at some of the coffee farms were horrible. We witnessed widespread poverty and sickness; teenage girls with children; and a lack of food, proper sanitation and clean water, among other things.

Media reports rightly shined a spotlight on these appalling conditions, and some organizations vowed to improve the quality of life. Now there is greater — and deserved — scrutiny of conditions at coffee farms and other production facilities worldwide. Conditions on some of the farms have improved.

Ensure that your supplier also is committed to permanently improving quality of life for workers and that such workers are fairly treated.

Establish long-term relationships

The value of using a supplier that has established long-term, face-to-face relationships with all of the facilities or ancillary businesses necessary to provide that product can't be overstated. Today, some refer to this practice as "direct trade" — cutting out the costly middle men.

Ask the supplier to explain how it plans to be in business five or 10 years from now. In addition, find out if you will have round-the-clock access to your supplier's top executives. And check to see what resources it has in place to correct deficiencies in the workplace or supply chain.

Ask about support

Also ask the supplier if it is committed to helping increase consumer and media (both traditional and online) awareness to drive sales. What ideas does it have, for example, when it comes to partnering with other community organizations to build store brand awareness?

True, the supplier that offers the lowest price isn't necessarily offering the lowest quality. But by asking these and other questions, you can learn if the supplier with the best price also offers the best value for your company and the consumer.

Jon B. Rogers is the founder and president of The Rogers Family Co. (www.rogersfamilyco.com), a Lincoln, Calif.-based provider of national brand and store brand coffee that is dedicated to socially and environmentally responsible farming and production practices. E-mail him at [email protected].