What is the best way to deal with a sole supplier and if a competitor appears against him in the market is that will affect your relationship with him?

When dealing with a sole supplier, although both parties understand that there is an imbalance of power since you can only acquire the goods/services from the sole supplier, the general dealings should be based on firm understanding of business protocols and not to undermine one's legitimacy as there is a formal agreement and contract obligations between both parties.

 

In the case of direct procurement with a sole supplier where there are no alternative options, it is best to evaluate the offer based on market standards and the importance and urgency of one's business requirements. The agreement should be locked in for a longer period to prevent any cases of price escalation during renewal. Finally, the ability to say 'no' to a unreasonable offer is always the best strategy one can adopt in offer evaluation and subsequent negotiations.

First of all, I would not like to put myself in a situation where I do not have any alternative and my procurement is confined to a sole supplier. Having said this, there may be a real life situation when one has to confront such a situation. The best strategy is not to let the sole supplier realize that you do not have any alternate, technically as well as commercially. Find out your strong points and his weak ones before coming to the negotiating table. The final outcome shall depend upon respective strengths and weaknesses.

For the second part, I would assume that if carefully handled, the appearance of a second supplier would add to your strength and your earlier sole supplier would be in a better mood to accommodate you. This is a business world, after all.  

You have to be in a mutual strong Relationship with him & if a new competitor appeared in the market you have to make the same relationship with the new one without losing the1st one ( keep balance) 

I think if you have sole supplier, the best way to go about it is to treat him as a partner. Make him understand that good business for you translates into good business for him. If a competitor appears, it should only move things a little bit in a positive direction, both for you and for the previously sole supplier. I think it can make your cooperation even better, stronger and more efficient.

to test the new supplier b on small batches  after visiting and knowing his process capability in order to know quality and schedule and quality while the majority  remains with older supplier