6 Tips for Managing Vendor Relationships
Managing vendor relationships is an important part of your business operations. Vendors provide the necessary materials to manufacture or package your products, so they play a major role in your success as a company. Nurturing these relationships has proven to be good practice. There are plenty of ways you can create strong vendor relationships that ultimately improve your ability to function as a business. Here are a few tips to help you manage your vendor relationships with confidence.
1. Communicate Effectively and Often
Communication is key in any relationship. We hate to sound so cliché, but it’s the honest truth. How you communicate with your vendor determines the success of the relationship you’re building. It’s not just about communicating often but making sure that you’re being effective with your communication.
You have to share the right information with your vendors about every application if you want them to give you the best option for your products. You can’t withhold certain features of the product or process you’re using, or they might not fully understand what you need. Keep vendors up to date on project timelines, changes in the project’s design, and whatever else might impact the supplier’s ability to function. Always keep them in the loop so they can effectively do their job.
2. Create a Win-Win Situation
When negotiating contracts, don’t try to undercut the vendor. Understand where they’re coming from and settle on deals that will ultimately help you both reach your goals. You’ve invested time in finding the right vendor, so don’t let them go over a small disagreement. Make sure you’re listening to their needs and considering them. They will likely do the same for you, and by doing this you’re creating a relationship of mutual respect and trust. Creating that win-win situation between you and your vendor will help develop a long-lasting relationship that can be trusted and relied on time and time again.
3. Appreciate Their Expertise
All of the individuals who interact with you are experts in their field. They bring valuable industry knowledge and experience to the table, so you should always take advantage of their know-how. These people offer an abundance of information and are typically more than willing to share. By letting them get involved in the planning process, you have access to new ideas and innovations that can drastically improve your overall operations. Take time to speak with vendors and get their opinions or recommendations for your different applications. Make sure they know how much you value them in this partnership, and you’ll always have someone working to get you the best solution.
4. Focus on the Long Game
Vendor relationships are supposed to last. When selecting the different vendors you plan on working with, you should be focused on finding companies or individuals who will be a part of your business operations as you grow. While it may save you money or time to pick manufacturers based on short-term benefits, such as sales or special offers, it won’t help you build a relationship that is dependable for the long-run.
Switching from vendor to vendor could hinder your relationships with previous vendors who expected you to trust them for your supplies. Suddenly, those specials and deals might disappear, and you’re left with no personal connection to anyone at that company. Focusing instead on creating lasting vendor relationships can help you build trust and accountability. This makes vendors more likely to work with you on things that are important to you, like the price and quality of your products.
5. Set Clear Expectations for the Relationship
When you begin a relationship with a new vendor, it’s important to set clear expectations for how business should be handled between the two of you. This is usually done within the written words of your contract, but expectations can also be stated verbally in different meetings as well.
Make sure your vendors understand how you prefer to be contacted, what is expected of them in an emergency situation, and how any potential issues should be solved between your companies. Setting clear expectations in the beginning will help you regulate the relationship and maintain trust and accountability when things aren’t running as smoothly as you hoped.
6. Agree on Ethical Boundaries for Business
While you always hope that no vendor would go behind your back, the reality is that sometimes they do. Perhaps you have a customer that the vendor could sell to directly and in turn, that vendor would cut you out as a middle man. This is an awful situation to handle if there are no ethical boundaries and contracts in place with your vendor.
Setting up ethical boundaries that define what is acceptable and what is not will help you avoid competition and create trustworthy relationships you can depend on. Most vendors are open to setting ethical boundaries and might provide their own guidelines without needing to ask. But if these ethical boundaries aren’t outlined from the beginning, you could end up losing a customer and hurting your business.
Now that you know some of the ways you can manage vendor relationships with confidence, we hope you can find a network of suppliers that will greatly improve your business operations. Vendors are essential for your success, so learning how to properly work with them will allow you to accomplish your goals as a company and create valuable relationships with industry professionals.