Stocking Up Find the right suppliers to make building your inventory a breeze

Small-business owners today face a daunting challenge: learninghow to survive, let alone flourish, in an arena where the bigcorporations get fantastic wholesale prices by buying hugh amountsof product in bulk. How can entrepreneurs hope to compete? By usingsimple common sense, and employing the one weapon that corporationsdon't have in their arsenal: the personal touch.

The smart way to start your business is by building a morepersonal relationship with your suppliers. Anthony Dell'Aquila,who started his second major operation two years ago, learned thislesson through a painful trial-and-error process with his firstbusiness. Today, he's applying the universal lessons that helearned to his new enterprise, the Hoboken Brewing Company, acompany he started with his brother Mitchell, a home-brewingenthusiast.

While Dell'Aquila considers a number of factors whenchoosing suppliers, he highlights service as the single mostimportant attribute in a good supplier. "It's acombination of things, but look for service-orientedcompanies," he advises. "Make that your number-onepriority."

Dell'Aquila opened his first business, Textiles by Anthony,14 years ago. Today, the Passaic, New Jersey-based company thrives,at least in part, because he has made the search for service andthe development of a personal relationship with each vendor a keyto his decision-making process.

"I get much more out of a company when I become sociallyinvolved with them," Dell'Aquila says. "Obviously,you can't have a social relationship with everybody you dobusiness with. But, for instance, there's a thread guy I dobusiness with. I found out that he likes salmon fishing, so Iinvite him to come with me every year. Even if they're not aservice-oriented company, they serve me well becausewe've been socially active."

While Dell'Aquila swears by his conviction of findingsuppliers that offer a personal touch, his business lessons havealso taught him that finding those who are customer-oriented canrequire a lot of work. The first place he begins this search is ina standard reference book. "The Thomas Register is a biginvestment, but it's well worth it," Dell'Aquila says."Every manufacturer in the world is listed in here. It'slike the encyclopedia of vendors."

Once a supplier is located, the process of checking up on thecompany's references requires some persistence. One instancethat Dell'Aquila recalls occurred during his search for beerdistributors, in which he went through the painstaking process ofinterviewing liquor retailers to see who was the best local beerdistributor in county after county.

"You sacrifice one day and do your homework, and get theanswers you're looking for and use them," he says. Afterdiscovering one distributor had a fabulous reputation amongretailers, Dell'Aquila came to the conclusion that this was theright distributor for his company. It was the kind of reputationthat could only be earned by providing top-flight service.

In many cases, particularly if a company is looking to check upon a potential vendor who is not located nearby, Dell'Aquilasays that getting four or five references and making some telephonecalls will produce the best results.

"Every businessman is going to tell you pretty much how asupplier is," he says. "You call up and introduceyourself, and just say that you are calling to ask about theirbusiness relationship with this supplier that you'reconsidering. Try to contact the owner of the company and talk tohim as one businessman to another; he'll usually respect thatand give you honest information.

"A lot of times, they'll say something like, `Don'tsay it came from me, but you've got to watch yourinvoices--keep an eye out.' "

As the relationship between supplier and buyer evolves,Dell'Aquila says it takes on qualities that transcend business.The trust and friendship that often grow within this relationshipcan lead to some insights and friendly advice from a supplier.

"By having that relationship, it allows me to say, upfront,to that person, `I can get it better, I can get it cheaper fromanother guy.' I'm not telling him that he has to lower hisprice or I'm going. I'll tell him in a way that maybehe'll suggest, `Oh, I can beat that.' Or he'll tell me,`Anthony, the reason that you're getting it cheaper is becauseyour giving up this.' Sometimes cheaper isn'tbetter, and your supplier will be able to tell you that," hesays.

Regarding the question of paying for supplies upfront or findinga way to establish finance terms, even if a start-up business hascash on hand, Dell'Aquila strongly suggests pushing to get afinance agreement.

"Credit is something you have to go out and get," hesays. "At least with your main suppliers, you have toestablish credit terms with them before you go into something.Because if you wind up in a situation where you have to hock yourhouse to get credit, you're already starting out behind theeight ball. Business is tough enough; you have to go into it with agame plan, with a business plan, where you start out with nostrikes against you."

Beyond just having a straightforward buyer-seller relationship,Dell'Aquila has found advantages in joining forces with asupplier to provide a joint venture to a third-party buyer. Theadvantage in the joint venture is that the supplier and theirsmall-business partner have an opportunity to produce goods on alarge-scale, specified-order basis. Though his brewing company hasyet to participate in a joint venture, Dell'Aquila has beenvery successful using this practice with his textile company.

"The key to a lot of success is companies developingcooperation," he says. "A fabric guy, which is called apiece-goods guy, and a contractor like myself, we get together anddo a deal with Wal-Mart. They give us a guaranteed order for a verylarge quantity of shirts. Wal-Mart is getting the best possibleprice from the vendor, who's supplying the fabric, andthey're getting the best possible labor price from my textilecompany. With all three companies working together, no competitioncan touch us."

The 37-year-old was able to parlay his own advice into $100,000in sales in his first year as a microbrewer. But no matter how bighis business may get, Dell'Aquila will stick to his notion ofmaking personal connections with everyone with whom he doesbusiness.

"No matter who you're doing business with--even the guyon the corner selling hot dogs--always make a relationship,"he says. "That company will do more for you. It will treat youlike a customer and a friend."

Food For Thought

The Thomas Register is available from Thomas Publishing, andcomes in a set of 33 oversized bound volumes for $240, or on CD-ROMfor $395. To order, call (212) 290-7277. The Thomas Register isalso available on the Internet. Visit their Web site at http://www.thomasregister.com.