Follow These 5 Steps to Build a Strong Supplier Relationship
As a business owner, you need good suppliers. Without them, you simply can’t get the products, supplies, or materials your business needs. Or, you get them, but it’s a lot of hassle involving late shipments, breaks in the supply chain, poor communication, last-minute pricing changes, and other drama that you don’t need when you’re trying to run a business.
So, when you find a good vendor, hang onto them with both hands. Pay your bills on time, work to foster a connection, practice good communication, respect their time, and give referrals. With these strategies, you can build the rock-solid, longstanding supplier relationships your business needs to thrive.
1) Be a Good Customer and Pay on Time
If there’s one single thing that you can do to build a strong relationship with a supplier, it’s to pay your bills on time. Vendors have expenses, too, and they also have families to feed — they’re relying on you to pay your bills promptly and according to the terms you negotiated. Nothing will make a vendor ditch you faster than trying to renege on your payment terms or renegotiate those terms after you’ve already placed an order.
2) Get to Know Your Suppliers
Just as with any other relationship, the core of a business relationship lies in connection. Give your vendors facetime. Meet supplier representatives in person at your facility, so they can get a feel for who you are as well as what your business is like. Tour their facilities as well. Share your business goals and problems and give them the opportunity to offer solutions. Bring them into your strategy meetings. Invite them to corporate picnics and other fun functions, like office holiday parties. Extend holiday greetings and well-wishes to contacts as appropriate. Pick up the tab for lunches or dinners eaten while talking shop.
3) Give Plenty of Lead Time
Vendors need time to produce the supplies and materials, or perform the services, that your business needs to meet its goals. Short lead times can stress out your vendor’s staff times and leave the organization as a whole feeling disrespected or undervalued. Keeping your vendors up-to-date about what supplies, materials, and products you need and when you need them shows that you value your business relationship and want to optimize it to best meet your mutual goals.
Giving your vendors adequate lead time isn’t just about making them feel better, though. It also guarantees that they have enough time to fill your orders, and that can prevent supply issues for your company. You’ll be less likely to run out of stock of popular items. Communicating about important new promotions, products, or other upcoming business developments early on gives vendors more leeway to make suggestions that could be instrumental in pulling off your project, as well as giving them ample time to prepare for a large order.
4) Practice Transparency and Open Communication
Communication is the bedrock of supplier management. It should remain strong and transparent, even — perhaps especially — when problems crop up. When they do, remember that your vendor is your ally, and don’t be accusatory. Clients have complained about the quality of a product? Let your vendors know and give them a chance to work with you to solve the issue. The more effort you put into collaboration, the easier it will be to face challenges. It helps when both of you are clear about your expectations and responsibilities.
You should also keep suppliers in the loop regarding changes in your organization that could affect them. Are key personnel moving on, or are you hiring creating a new role that will interact with the supplier? Are you planning to introduce a new promotion or product? Your suppliers might be instrumental in helping you form new marketing strategies and can help you find new customers, as well as new sources of material and supplies.
5) Give — And Ask For — Referrals
What better way to show your gratitude to your vendor for their help than to refer them to a colleague? Referring your great vendors to others is an excellent way to earn their loyalty. And don’t be shy about asking for referrals for your own business, either. In many industries, key contacts all know each other, or at least have mutual contacts in their respective networks. When you have a strong relationship with a vendor, you can capitalize on that by asking them for help to expand your network or customer base.
Strong supplier relationships are the foundation of any successful business, as they’re what helps you get the materials and supplies you need to meet customer demands. You’d soon run into trouble if you didn’t have your network of great suppliers, so take the time to foster those relationships, and watch your business grow as a result.