Hey, how strong is your business relationships with vendors? If not good, do you know how to establish good relationships with suppliers? And what are the keys to maintaining good relationships with suppliers?
Suppliers can positively impact your business. They play an essential role in almost every type of startup; therefore, building strong vendor relationships is essential. However, most businesses do not know how to build and maintain good relationships with suppliers. That’s why we’re creating this post/guide to help you build strong, healthy, and long-term relationships with vendors.
Almost every person needs vendors to start a business. And so, you should utilize the highlighted ways below in building relationships with vendors for your business.
There are various ways how to develop vendor relationships; some are easy to execute, while others aren’t. All in all, for good vendor relationships, use the following ways:
As a startup, starting locally is the best place to start when building vendor relationships. This action will alleviate many problems with dealing with national suppliers. Besides that, developing good relationships with a national supplier can be a much more complex and daunting process that might end up costing you.
So, to avoid all that, do your research, know who are the potential local suppliers and then reach out to them. When approaching them, ensure that you mention that you are contacting them as you would like to promote local businesses. This helps build a good rapport.
2. Understanding your vendor
This isn’t actually an option but rather a necessity if you are to build a successful startup. And, how do you understand a vendor?
Well, understanding vendor trickles down one thing; what is important to the vendor.
This obviously encapsulates lots of key points, such as:
● Their preferred contract formalities
● Their preferred and best standard procedures to operate
● Their requirements
These are just a couple of things that you need to know in order to understand your vendor.
Proper screening is a very important part when selecting suppliers as it ensures you get the right supplier for your business. To ensure you do your due diligence when screening potential suppliers, do the following:
● Check and compare their pricing
● Check their past customer reviews
● Look at their shipment time
● Check who offers the best vendor services based on your checklist
● What do you value more, and which of those potential suppliers offer that?
All, including any other important details or requirements, will help you determine the right potential client.
4. Provide adequate lead times:
Before striking a deal with any supplier, be sure that you have highlighted your requirements and expectations well to your potential vendor. Let them know your expected quality and service expectations, your payment methods, and your deadlines information.
Providing adequate information will also apply when you’re placing an order with them. This action is essential as it will give them much lead as possible, thus lessening the chances of any failures. Unless there is any important competitive reason why you should share adequate information, doing so will ensure your needs are perfectly mate.
5. Personalize the partnership:
Personalized solutions are the primary key to attending success in every business. So, why not apply this to your startup?
Personalized relationship helps develop strong business relationships with vendors, and to do so, you should:
● Include them in relevant strategic meetings that will involve them.
● Visit their offices and get to know a little about how their operations work
● Invite them for business invents or to break bread
This strategy aims to make them feel part of your business, which mostly brings positive feedback that helps your startup grow.
6. Always pay on time:
Punctuality in payments is another essential component of solid business relationships with vendors.
Before placing an order, it is recommended to negotiate favorable payment terms; however, after placing an order, pay your bills on time. Don’t try changing the rules after the order is placed because that will send a wrong message to your supplier, which won’t end well for you and your business.
If you can’t meet the payment deadline, it ok to call your suppliers and tell them why you can’t meet the deadline and when and how you are planning to make payments. Doing this will at least buy you some time, but remember, next time, meet the deadline because you can’t keep coming up with excuses.
Note: Suppliers always work well and effectively with customers that pay their bills on time.
7. Keep your suppliers updated and in the loop:
As noted earlier, sharing information with your suppliers is important. Of course, you can’t share everything, probably due to competitive reasons. However, for the information that can improve your vendor relationships as well as their services to you, without compromising anything, share them.
The things that you can share with your suppliers include things like:
● Changes in personnel
● Structural changes in your company that might affect them as well
● Details about new products
● Special promotions that you’re offering might help you land new customers.
One of the key components to a successfully growing business is referrals. This can go both ways; the vendor can refer you to potential brand owners, or you can refer to potential customers (not direct competitors). Referrals help build a close relationship with your vendor, which will definitely boost your business performance.
Having strong business relationships with vendors can easily see your vendors connect you with new potential customers or brand owners through reference. Therefore, this action will help your startup build a good and strong network with vendors and other businesses as well.
9. Have a clear and concise Vendor Agreement
A good bond between you and your vendors can be forged without a contract that bonds both of you. A Vendor Agreement is a beneficial tool that helps minimize risks, protect your brand, and define what actions in case of any serious situations.
Creating vendor agreements that cover everything can be challenging, so we recommend using a vendor contract template.
A strong business relationship with vendors comes with lots of benefits, including getting new customers. In fact, you will be surprised that there are good vendors out there that might help you bring a new customer through your door.
The strategies mentioned above aren’t the only ones that can help you establish good relationships with suppliers. Other ways can help, such as being loyal to your vendor, risk sharing, building trust, and performance measurements.