MANAGING VENDOR RELATIONSHIPS
You need your suppliers. They need you as well. A good partnership is a win-win relationship between you and your vendors. However, it takes effort; it does not just happen.
Managing your vendor relationships is essential to ensure a steady supply of materials or services that you can use for your products or to enhance your services. This means selecting suppliers with care and building a connection based on mutual trust.
When you have a good working relationship with your vendors, you can navigate downturns in the marketplace and respond quickly to a big upsurge in orders.
Here are several ways to ensure a mutually beneficial outcome with your suppliers.
EVALUATION AND SELECTION
Select your vendors with care. Don’t rush in and simply choose the least expensive price for the goods you need. Like every decision that has long-term outcomes, base it on thorough research.
Follow this process when looking for a supplier:
Make a list of potential vendors
Request quotes and a business proposal from each
Evaluate the information you receive with an eye to the requirements of your business
Decide on the best one or two matches
Negotiate a contract
The slow, steady process of researching and negotiating lets you know what you will be paying for, when you receive goods after ordering, and if there are extra fees or expenses involved in the transaction. The last thing you want is to succumb to a fast-talking salesperson with questionable reliability.
Just like any major component in your business, vendor relationships need proper management. It is not usually wise to sign up with a supplier, then put the entire process on autopilot.
It is always best if each vendor works with one person in your organization. They should check in frequently with their contact with phone calls and emails, and visit their office periodically. This makes the connection stronger and more personal, enhancing loyalty and awareness. It can help both parties anticipate changes or new products or services that may be of value. It makes the vendor feel a part of your team.
Make sure the person managing each vendor responds to questions and concerns quickly. Without up-to-date information, the supplier can end up providing too little or too much of a material or miss deadlines. You need to show that you respect their time and the resources they have available. You are just one of their customers, not the only one. Your aim is to encourage a strong connection. The only way to do that is with frequent contact.
Always pay on time. If something happens where you cannot, get in touch with the vendor immediately. Explain what is going on, set up a payment schedule and stick to it. Nothing will get you on the bad side of a vendor faster than a spotty payment record.
Even after you know a vendor well, get everything in writing. Never depend on verbal agreements or someone’s memory. Follow up phone calls with emails to give both sides a record you can reference later to help remember important points or dates. Ask your supplier for progress reports so you can spot potential problems early.
GETTING THE MOST OUT OF VENDOR RELATIONSHIPS
As in any relationship, you teach your vendor how to treat you. Let him know directly and often exactly what your needs are. Make it clear that you expect good service.
Expect loyalty from your vendor and be loyal to them. If they are going through a bad patch, try to help and don’t drop them if they have been a reliable resource for you in the past. Give them referrals. Send them more work when you have it. Don’t make outrageous demands and expect immediate compliance.
Feel comfortable asking for discounts if you have been a good customer. How much you get will depend on how much business you send their way, what the terms are and how long you have been working with them. This is also where a good relationship shows its worth.
Bring problems with service to the attention of your supplier quickly. Make sure you get the matter resolved, even if you have to keep working your way up the chain of command.
Remember, take your time finding the right vendors. Then make the effort to get to know them, their capabilities, and their needs. Develop a good working relationship and keep communication consistent and constant. With reliable vendors as part of your team, your business can grow.
If you’re interested in learning what we can do for your business, contact a Relationship Manager to discuss your business needs and the solutions BancorpSouth can offer. Contact Us or Find a Location near you.
© Fintactix, LLC 2021