How to Improve Your Vendor Relationship?
Sometimes, small business owners overlook the value of maintaining positive relationships with their vendors. For a business to succeed, it’s important they understand their vendors’ needs and build a strong relationship based on trust. Here are some valuable tips I learned from my experience.
1. Pay Your Bills on Time
As your vendors work on thin margins, cash flow is essential. When you consistently pay on time and respect agreed-upon conditions, you demonstrate appreciation for their contributions and your business rises to a “most trusted” status in the vendor’s eyes. This comes in handy if you need to call on the vendor for rush deliveries or other special requests.
2. Make Sure the Vendor Understands Your Goals
A vendor who “gets” your business is of far greater value than one who just goes through the motions of filling orders. Take the time to communicate your goals and where you plan to take your business in the future. Invite their suggestions on the role they can play in achieving these goals. A trusted vendor will likely have unique insights into the industry and offer helpful feedback you won’t find anywhere else.
Keep your supplier updated on planned product updates or a new launch. Extend an invitation to attend strategic meetings or to simply tour the office to get a better feel for your business. Consider visiting their place of business and learning more about how they operate as well.
3. Assign a Dedicated Vendor Manager
In most cases, the relationship works more efficiently when the vendor has a single point of contact within your business. Assign a person to take on this role and be responsible for ongoing communications. Under this arrangement, the vendor can quickly get an answer to questions regarding inventory, delivery, etc., instead of wasting time trying to find someone with the authority to make a critical vendor-related decision.
4. Find Out What the Vendor Needs from You
A strong relationship works both ways. When you understand how a vendor chooses to operate, the process generally runs smoother. Be sure you fully understand the payment terms and types of documentation the vendor requires, as well as their preferred channels and time-frame for orders and deliveries. Adjust your orders to meet these preferences and give them as much lead time on orders as possible.
5. When Mistakes Happen, Don’t Point Fingers
Problems are inevitable on the occasional processing or delivering of an order. Your vendor relationship will be strengthened if, instead of pointing finger and assigning blame, your vendor manager works with his or her counterpart to clarify the situation and take steps to ensure the same issue doesn’t crop up again.
6. Refer a Trusted Vendor to Others
When your vendor is contacted by a prospective customer that you referred, their loyalty to your business becomes stronger. This is a concrete way to show your appreciation for their services and it’s likely they will return the favor at some time in the future with a referral.
Businesses that see vendors as partners, rather than just another operational necessity, gain a competitive advantage in the marketplace. Because of the relationship they’ve developed, they can depend on vendors to come through in times of increased customer demand and to offer the best pricing arrangements available anywhere. In these situations, everyone wins.