Vendor Selection Process flowchart

The vendor selection process flowchart: everything you need to know

The vendor selection process flowchart has become an increasingly popular tool to help businesses choose the best vendors for their products and services in the last few years. 

But how does it work? What goes into creating one, and why do you need one in the first place? In this article, we will discuss everything you need to know about creating a vendor selection process flowchart from start to finish so that you can implement this powerful tool in your business as soon as possible.

Defining your needs

Everyone has different needs when selecting a vendor. You will want to determine what is most important for your company before moving forward with the vendor selection process. To get started, consider the following questions:

vendor selection flowchart


● What are my company’s goals? 

● What kind of product or service am I looking for? 

● Do I have a budget in mind? 

● How long do I think this project will take?

● What other solutions might work better than our current system? 

● Does the vendor understand and meet our needs? -Are there any external factors that would be affected by choosing one company over another (e.g., location, timing)? 

● Who else should make this decision (e.g., management, marketing)?

● Can the selected vendor provide the needed products or services at a reasonable cost? If so, then they are worth considering further. If not, move on.

● What are their credentials, and how do they compare to competitors? It is essential to determine whether they have industry certifications or professional accreditations like the Better Business Bureau (BBB). 

● The last thing you want is an unreliable vendor who won’t stand behind their work. 

● Is there anything about them that doesn’t seem right?

● Does it feel as though they are trying to hide something?  

Researching your options

This is a general question, and there are many different ways that the question can be answered. 

For example, the first step in the vendor selection process is deciding what type of business you are opening. 

Once this decision has been made, it is easier to determine your needs and what type of vendors or suppliers will best fit your needs.

Some businesses need more than one vendor so that they may have an office supplier and a supply company. Other businesses may only require one or two types of vendors. 

If the number of vendors required is less than three, then an in-depth search for potential candidates should suffice. If more than three, then some form of competitive bidding or evaluation should occur.

Requesting proposals

It can be easy to get caught up in the excitement of a new project, but it is essential to take some time and think about your needs. 

Before you decide who your vendor will be, start by asking for proposals. A proposal is an offer from a company that tells you what they have to offer and how much it will cost. 

This information will help you decide whether or not this company is right for your project.

Evaluating proposals

It is crucial to evaluate proposals from multiple vendors. Here are some questions that will help you decide which proposal is best for your needs: 

● How long have they been in business? 

● What percentage of their company is women or minority-owned?

● Do they use environmentally sustainable practices? 

● Are they members of any industry groups, like the Sustainable Business Council (SBC) or the American Institute of Architects (AIA) LEED AP

● Have other companies you admire used them successfully before?

● Can they provide references? 

● Is there anything unusual about the pricing structure? For example, do they offer an hourly rate rather than by project size?

● How much work have they done on projects similar to yours, and how many are there in total (at least 10)?

Conducting reference checks

Reference checks are a crucial part of the vendor selection process. Find out what your potential vendors have been through in their professional lives and how they dealt with their successes and failures. 

You will be able to see if the person will be a good fit for your company, plus it is also an excellent opportunity for them to learn about you.

Selecting the vendor

When selecting a vendor, the company must have the necessary skills and resources to do the job. 

Reviewing its portfolio is an excellent way to determine if a company is a good fit for your project. 

You can also read reviews from past clients and speak with references to learn more about their experience working with the company.

It may be helpful to have someone from the company come in and present the challenges they have faced on previous projects so that you can gauge how well they would be able to handle yours. 

It is also wise to think about who will handle all the logistics once the project begins (e.g., overseeing day-to-day operations and facilitating meetings).

Negotiating the contract

How long does it take for a contract to be negotiated? Several factors can affect the negotiation process, including how many people are involved, the deadline for finalizing the agreement, and what needs to be dealt with. The following is a general guideline for how lengthy negotiations might take.

vendor selection flowchart


● Negotiations with one person might take 10 minutes to an hour. 

● Negotiations with two people could take anywhere from an hour to four hours.

● Negotiations with three or more people could take between three and eight hours. 

● Additional time will be required if someone new joins the discussion midway through. 

● Additional time will also be required if there is significant disagreement among participants. If that happens, additional meetings may be necessary to agree on specific points.

● While these guidelines provide a reasonable estimate of how lengthy negotiations might take in different circumstances, they should not be considered set in stone as every situation is different.

Signing the contract

In this step, the contract is finalized and signed. It should include an explanation of what services will be provided and at what cost, as well as deadlines for project completion. 

The contract should also include a clause about what happens if one of the parties does not live up to the agreement. 

Usually, one party will have the right to terminate the contract and pursue legal action against the other. If there are disputes between both parties, mediation or arbitration might be used to resolve them before they escalate. 


Now that you have a better understanding of the vendor selection process and how it works, it is time for you to start putting together your plan. Start by identifying which vendors best fit your needs, and then work with them. Keep in mind that this is a strategic partnership. Make sure they can provide all the services you will need before signing on with them.

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