6 Red Flags to Beware of When Finding New Industrial Subcontractors
Every new connection with industrial subcontractors, vendors, or suppliers offers a new set of challenges and chances for failure. Some industrial subcontractors are destined for failure from the beginning, while others can offer you a good start but fail to deliver at the end.
So how do you choose industrial subcontractors for a time-sensitive or crucial step in product development or supply chain expansion? There are some red flags that are warning signs regardless of the industry or service provided by the industrial subcontractors in question. Use this list to choose industrial subcontractors that can fulfill their end of the contract and meet all of your needs.
1. Delayed and Uneven Communication
Industrial subcontractors are often busy with ongoing work, so it may take a few weeks to receive an initial reply to your first message. But if you’re a few messages into a relationship with the industrial subcontractors you’re considering and you suddenly find yourself waiting days or weeks for a response, it’s not a good sign.
It could be due to further subcontracting on part of the industrial subcontractors, which creates quality control and cost issues. It may also indicate that the industrial subcontractors are having supply or labor issues, lack the experience necessary to complete your job, or any number of other issues. Timely and routine communication demonstrates that industrial subcontractors respect you and your company’s time.
2. Refusal on Important Terms
There are some terms designed to protect both parties in a vendor or supplier agreement that no experienced industrial subcontractors would oppose. These include:
- Fair payment terms, including delays of 60 or 90 days after delivery;
- Limited and descriptive warranties to protect you from quality and supply issues;
- Clearly worded requirements for delivery, purchase obligations, and other terms.
Good industrial subcontractors may want to negotiate the specific details of the sections of the contract, but they won’t try to scrap entire sections of the contract that are common place. It’s perfectly normal for industrial subcontractors to request custom terms rather than boiler plate agreements with few specific details. In fact, industrial subcontractors that don’t have any comments or changes to your proposed terms may also be sending a warning sign that they’re not as experienced or legitimate as they claim.
3. Lack of Solutions
Working out a contract for fair compensation and delivery requires input from both sides of the relationship. If the industrial subcontractors you’re interviewing are sending you lists of problems to change or limitations restricting what they can do for you, they should also propose possible solutions with those problems. It’s a sign that industrial subcontractors have the experience to deal with real-world product cycles and the unexpected challenges that pop up throughout the process.
Coming up with alternatives to certain terms or delivery constraints also requires considerable effort on your part. Industrial subcontractors willing to contribute to the process obviously respect your time and want to help the process along rather than expecting you to shoulder all of the work.
4. Fraudulent Behavior
With a little investigation into public reputation and private references, you may undercover warning signs of fraud and fraudulent behavior. Do the industrial subcontractors work exclusively for one company or fail to complete their contracts to other companies? Other industrial subcontractors may have their entire business copied from a competitor, from website content to legal documents, with no one qualified to do the work running the business. A little investigation into the legitimacy of a company’s business registration, marketing materials, and business documents can reveal a lot about the industrial subcontractors you’re interested in hiring.
Industrial subcontractors are business owners just like you, and their business needs to run smoothly to benefit your plans. Companies that make grand claims on their website and then change those claims in subsequent communications are likely to commit similar mistakes later. Any inconsistency in the terms you’re negotiating, such as a bait and switch situation after you think you’ve reached an agreement, indicates you’ll face similar problems in the future. It’s better to start over with a fresh set of industrial subcontractors rather than try to pin down a company that can’t stick to its own terms and claims.
6. Lack of References
Finally, any established industrial subcontractors worth hiring should have at least one reference to provide during the screening process. Making contact with the reference and verifying the information you have about the industrial subcontractors may take more time than you expect, but it’s essential to uncover secondary red flags. Industrial subcontractors with vague, outdated, and unreachable references are best avoided.
European Subcontracting Network makes it easier than ever to screen industrial subcontractors for these red flags and more. We present complete profiles of subcontractors in every industry and service level, so you can find the perfect match with a reliable background free of warning signs. Browse subcontractors.