The temptation to panic I have watched three clients this month scramble to lock in supplier contracts because they heard prices might rise for eight months. One signed a 12-month deal at 14% above their current rate. Another froze completely, hoping things would blow over. The third asked a better question: what do we actually need, and when? Market shifts expose how little structure most businesses have around supplier decisions. When things are stable, you can get away with gut feel and whoever you have always used. When costs spike or availability drops, that lack of structure costs real money. Why most supplier reviews fail People running their own thing tend to review suppliers in one of two situations: when something goes wrong, or when someone cheaper shows up. Both are reactive. Both miss the point. A proper supplier decision is not about finding the cheapest option. It is about understanding what you are actually buying, what risks you are exposed to, and what flexibility you need. I worked with a small manufacturing firm last year that was paying £4,200 a month for packaging materials. They had been with the same supplier for six years. When we looked at the contract, they were paying for next-day delivery they never used, minimum order quantities they always exceeded, and a credit facility they did not need. Switching to a supplier with a simpler offering saved them £680 a month. Not because the new supplier was cheaper per unit, but because they stopped paying for things they did not use. That is the kind of clarity most people skip. The three questions that matter When markets shift, I tell people to answer three questions before making any supplier changes: What are you actually buying? Not the product. The relationship. Are you buying reliability? Speed? Flexibility? Price certainty? Most supplier relationships bundle several things together, and you are probably paying for some you do not value. What is your real exposure? If this supplier disappeared tomorrow, what would break? How long would it take to replace them? What would it cost? Some suppliers are critical. Most are not. Knowing the difference stops you from over-investing in backup plans you do not need. What flexibility do you need? If your demand drops 30% next quarter, can you reduce orders without penalty? If it spikes, can they scale? The cost of inflexibility only shows up when conditions change. Right now, conditions are changing. The NHS problem There is a useful parallel in the news at the moment. The NHS is exposed to petrochemical supply chains for everything from syringes to stents. Rising costs and shipping disruptions in the Gulf are creating real problems. The issue is not that anyone made a bad decision. It is that dependencies built up over years without anyone mapping them properly. Small businesses have the same problem at a smaller scale. You do not notice how dependent you are on a single supplier until they cannot deliver. Or until their prices jump 20% and you have no alternative. How to run a proper supplier review Start with a list of every supplier you paid in the last 12 months. Not just the big ones. Every recurring payment. For most small businesses, this is 15 to 40 relationships. Sort them by annual spend. The top five probably account for 60 to 70 percent of your total. Focus there. For each of those five, answer the three questions above. Write it down. One page per supplier. This is not bureaucracy. This is you understanding your own business. Then ask: if I were starting fresh, would I choose this supplier? If the answer is no, find out what switching would actually involve. Get quotes. Check lead times. Understand the transition costs. Most people never do this because it feels like a lot of work when things are fine. When things are not fine, they do it badly because they are rushed. When to lock in, when to wait The instinct when prices are rising is to lock in long contracts. Sometimes that makes sense. Often it does not. Locking in works when you have high confidence in your own demand, when the supplier is genuinely critical, and when the price increase is real and sustained. It does not work when you are guessing, when you have alternatives, or when the market is volatile enough that a long contract might trap you at a peak. I have seen people sign 24-month deals to avoid a 10% price rise, then watch prices fall 15% six months later. They paid more, not less. If you are uncertain, shorter contracts with break clauses cost more per unit but buy you flexibility. Flexibility has value. Price it. The decision matrix approach When you are comparing suppliers, a simple decision matrix helps. List your criteria down one side: price, reliability, flexibility, payment terms, whatever matters to you. Weight them by importance. Score each supplier. Multiply and add. This is not magic. It is just a way to make your reasoning visible. When you can see why you are choosing one supplier over another, you can defend the decision later. You can also spot when you are over-weighting something that does not actually matter. The ALIRA. Decision Matrix tool at alira.london does this automatically if you want something structured. But a spreadsheet works fine. What to do this week Pull your supplier list. Export your accounting software or go through bank statements. List every supplier you paid in the last 12 months, with annual spend. This takes an hour. Do it Monday. Pick your top three by spend. For each one, write a single page answering the three questions: what are you actually buying, what is your exposure, what flexibility do you need. Be honest. If you do not know, that is useful information. Get one alternative quote. For whichever of those three you are least confident about, reach out to a competitor supplier. Not to switch necessarily. To know what your options are. Knowing you have alternatives changes how you negotiate.