A single supplier: the risk nobody calculates
Photo: Avila Ops Tecnologia
Single-supplier risk has a formula: how many days you would lack the product if the supplier failed today, times daily sales of that product. If your best seller depends on one supplier requiring 20 days to replace, and you sell R$ 300 daily, the risk is R$ 6,000 per failure. Nobody calculates this until failure happens.
For small businesses, a single supplier is the rule rather than the exception. They offer better prices, know you, and deliver without red tape. Dependence appears when they run late because everyone ordered simultaneously, precisely in the June week when you needed them most.
How to calculate risk by product
For each of your 10 best-selling products, answer three questions:
- How many suppliers can deliver acceptable quality? If one, continue.
- How many days would getting the same product elsewhere take from scratch: finding, quoting, sampling, receiving? Be honest. It is usually more than 15 days.
- How much of that product do you sell daily, in reais, during the relevant month?
Risk = replacement days × daily sales. Work out existing stock in days of sales and subtract it. With 10 days’ stock and 20 days to replace the supplier, exposure is 10 days of sales.
| Product | Suppliers | Replacement days | Stock in days | Sales/day | Exposure |
|---|---|---|---|---|---|
| Fondue kit (example) | 1 | 20 | 8 | R$ 400 | R$ 4,800 |
| Plain mug (example) | 3 | 5 | 6 | R$ 150 | R$ 0 |
These figures illustrate the structure, not market benchmarks. The final column matters: it shows where risk concentrates and what is worth protecting.
What to do about high exposure
The goal is reducing exposure through one of these approaches rather than replacing the supplier:
- A qualified second supplier. You have quotes, samples, and a known lead time. Buy from them once every three months to maintain the relationship. It need not be 50/50.
- More safety stock for concentrated items. If replacement takes 20 days, holding 20 days’ stock eliminates exposure. It ties up capital; compare that with the exposure column.
- An alternative catalog product. If a fondue kit depends on one supplier, a cheese kit from another keeps sales going until the first arrives.
- A written seasonal lead-time agreement with the sole supplier. It does not prevent failure, but reduces surprises. A supplier knowing you will order 300 units on May 14 can prepare.
For some products, the sole supplier is what makes the product good: crafts, regional products, proprietary recipes. Protection then comes from safety stock and communication rather than replacement.
Where a system helps and where it does not
A system shows concentration: how many products and how much sales depend on each supplier. A two-column report that a spreadsheet cannot produce automatically because supplier details rarely appear in product records.
It also measures each supplier’s actual lead time, order by order. They quote 7 days. In June, they deliver in 12. You know this only if each receipt records order and receipt dates.
What it does not do: find the second supplier. That takes conversations, samples, and visits. The system tells you where to look.
What to do now
Build the table for your 10 best sellers. It takes half an hour. The highest-exposure product gets a second supplier quoted this month or 20 days’ stock, whichever costs less. A system recording actual supplier lead times and product concentration: avilaops.com/sistema-para-pequenas-empresas or contact us on WhatsApp: wa.me/5517997811471.
Frequently asked questions
Is having only one supplier bad?
It is a risk with a monetary value. With low exposure (low sales or easy replacement), one supplier is the right choice. With high exposure, you need a plan: a second supplier, safety stock, or an alternative product.
How do you find a second supplier?
Ask the first whom they consider a competitor. Ask similar stores in other cities that do not compete with you. Request samples before any order. Then place a real small order to measure lead time and quality in practice.
How much safety stock should a single-supplier product have?
Enough to cover replacement time at peak-month sales. If replacement takes 20 days and June sales are 10 units daily, 200 units cover the risk. Compare that capital with calculated exposure.
Turn what you learned into your next step.
Tell us about your company and what you want to improve. We can explore the right tools, integrations or custom project together.