Vendors are the integral part of your business operations, and also plays a crucial part in the success of the business.
Your relationship with the vendor determines a lot even if you have sorted everything out.
Finding the right vendor, building and maintaining a long-term relationship with them should be your one of the utmost priority.
It gives you a competitive edge in the retail industry. With vendors on your side and growing together, retail business can be smooth and profitable.
Here we learn about how you can improve vendor relationships and initiate more strategic vendor management in your business.
Finding The Right Suppliers
Well, you can build stronger bonds with your vendors but it usually starts from finding the right one for you.
The foundation lays the ground for the future relationship you will grow over mutually-benefited business.
To find the right vendor for your business, you need to look for right sources, and here are few tried and test ones :
Referrals are always a great source for getting more business.
Especially if it is coming from your existing reliable vendor, you can find the right supplier for your business.
The referrals can also be from other experts or known business owners in your niche or category as well.
In this way, you have more to trust with and higher chances of sticking out for longer relationships.
Look for the industry magazines to get required information on what products are selling best in the market and who are manufacturing or supplying them.
You have to pay attention to the advertisements in the publications where usually suppliers post their ads regarding new products and services.
It is about keeping observing and looking for new products, suppliers and vendors out there.
Be aware of all the industry events happening in your city and even all around the country.
These industry events, buying shows, expos, seminars are great places to find suppliers and vendors.
Not just that, you can increase your networking and business circle through these industry events.
Don’t forget to exchange business cards and communicate often with them.
Even though many don’t have an opportunity rightaway for you but they can definitely offer you some in the coming time.
You can also check out online vendor directories such as Alibaba, ThomasNet and others.
These online directories allow you to find supplies and vendors according to your requirement.
You can even filter your search to look for more relevant and niche-related vendors or suppliers.
This is another great option to track down suppliers and vendors for your business.
Most of the trade association offers their own network and directory services to small businesses.
They are also keen to help businesses find and connect with the right vendors. Many of them, you don’t have to even be a member to utlize their network benefits.
Even with being a member, it is profitable to build more connections including vendors and other business owners as well.
Sharing All Information And Priorities
A successful vendor management comes from the tansparency of all the essential information and piorities between vendors and business owners.
And that is something you should be focussing on to build stronger bonds with your vendors or suppliers.
However, it doesn’t mean you need to simply show all of your accounting books to your vendors or share them with your account credentials.
The idea is to work on the required vendor management practises with information relevant and helpful for vendors.
You need to share information related to :
- New product launches
- Any change in the product design
- Update regarding the product
- Forecast information
- Expansion details
- Relocation changes
Providing Lead Time
It is important to keep your vendors in loop regarding anything and everything going on with your business operation and product upgrades.
You need to be consistently informing them, and that too early on about your forthcoming business strategies, goals and special promotions as well.
When you keep them in loop, they are more able to suggest an appropriate inventory for you to prepare the best for larger orders.
Providing them significant lead time helps them to maintain your products in the stock all the time.
And there is no telling what inventory issues or lack of products in the inventory can do to your sales and brand reputation.
Balance Between Comittment And Competition
To ensure a smooth relationship with your vendors or suppliers, it is critical to obtain commitment from your vendor.
This commitment is essential in the regular operation of your business where vendors are expected to be supportive and assisting.
Vendors are also expecting a level of commitment from your side as well. So there is a trust level required between you and your vendor.
However, it doesn’t mean you do not serve the competition, and make your bids. And definitely not to just blindly accept the prices they are offering you in the first place.
All in all, there is a fine balance at play you would want to maintain in order to develop a healthy relationship with your vendor.
Under Promise And Over Deliver
If you are not sure about anything, this is the best strategy to go for, and that is too in general with any business or service.
When you communicate with brands regarding their requirements, always set realistic goals and expectations.
And not just for the brand for yourself as well, makes the whole deal immune to over-expectancy and disasspointment.
Most of the time, you only get one chance to prove your worth through value and experience, but it can consume you to cater rigorously to every want and need of your vendor.
And that still usually doesn’t work! It only distracts you, makes you nervous, sometimes desperate and puts your wrong foot forward putting the whole deal in jeopardy.
The better approach is to identify some key requirements of your vendor or the particular areas where you can excel the best, and work on them.
Don’t try to do everything, rather focus on key areas to excel and impress with.
Allows Your Vendors To Help In Your Strategies
Vendors are usually a key part of your business operations, and if that’s the case with you as well, it is critical that you let them participate more.
Be welcoming with your key vendors and allow them to get involved in the business operations.
After all, they are the key players with a significant role to play in the whole manufacturing to selling process of your product.
You have to remember the fact that you brough the vendor in your business because they can make the product better or cheaper than you.
So definitely, they are more experienced and expertise in that area.
So it is only going to give you a competitive edge when you allow vendors to strategize with you.
Not to mention, dissolve any possible conflicts or misunderstanding, even strengthens the bond inbetween.
Refer Your Vendors To Others
This is certainly going extra mile with the vendor relationship and goodwill with a good payoff.
This works when you really feel that the vendor you’re working with, is extremely excellent and dedicated, be forward to refer them to your colleagues.
Doing this will really help your vendor’s business and also show your gratitude towards them for being so supportive with your business.
Remember, they are also in business, so helping them will be a really good working gesture.
They are more likely to be loyal and cordial with you in future and work with even better terms.
Harnessing The Power Of No
Overrelying and underlying on the partner is no good relationship. The same goes for vendor relationship management as well.
In order to bring the vendor in, you sometime would like to just give in to all terms coming your way, saying yes to everything.
This is you setting yourself for a grand disappointment and an eventual failure.
Remember to say no to the things that aren’t good for you or possible for you to achieve or manage.
Here are two situations for you when this happens :
- This happens most of the times when a supplier or vendor asks you whether you have capability to pull something off, and you say ‘yes’ knowing you cannot.
It is okay to understand your limitations and acknowledge them, the same goes for your preferences and requirements as well.
- Another classic example is when you are negotiating with your vendor and you push back on margins to just make the deal enough for your loss.
Businesses are there to make money!
If you have an opportunity at your hand where you can see yourself not generating enough margins to take away the profits, be ready to push back with logical reasoning.
Don’ t make this thing about “ opportunity comes in a life-time” kind of scenario and just take it blindly.
Keep your calm, take your time and see through the deal.
Focus On Building Long Term Partnerships
Vendor relationship management requires investment in a long-term relationship rather than short-term gains.
You do not latch onto the short-term profilts or marginal cost savings a lot when you want to develop a long-lasting relationship with your vendors.
Small businesses often caught up in constantly changing their vendors just to save a penny here and there.
That is not sustainable to begin with. And further it is not going to save you a lot of money.
In fact, it is costing you even more in the long run. Not to mention, impact the quality and also affect the change in product results.
Long-term relationships with vendors will reap you tons of benefits over time such as trust, preferential treatment, realiability, accessiblity to insider knowledge and experts at your side.
Try To Understand How Your Vendor’s Business Works Too
Don’t forget that your vendor is a business owner too, he or she is also there to make money.
You cannot always expect your vendor to keep cutting the costs as it can result in quality degradation or even put them out of business..
To really be cordial and connected with your vendor, you need to empathize with them, and for that, you need to understand their business as well.
Vendor management isn’t just about managing vendor relationships or their contribution. It is also about how you can contribute to help them serve better.
So, understand how their business works. Ask questions to them that help you apprehend better of their operations.
Make Prompt Payments
There are more chances of building a relationship with high trust with your vendors if you really respect vendors’ conditions.
Especially if you are proactive about it and done in a good faith, it is only going to strengthen the bonds with your vendors or suppliers.
One of the best ways to do that is to consistently pay your bills on time without even mentioning it.
It gives them a signal that you are a reliable customer and always the one to count on.
If you stick to their rules, they are more receptive to your problems and concerns as well.
Even at the time of need or favour, they can give you a rush order or different payment terms in future to help you out.
Always Negotiate For A Win-Win Situation
Consideration is something you need to learn with your dealings with vendors. You need to consider their benefits as well when you want to strike a deal.
For that, you also need to negotiate for a win-win situation for both parties. It is essential that negotiations are done in a good faith.
Don’t strong arm your vendors to get the deal that only benefits you or even put them in tough situations.
Find the negotiation points which are mutually beneficial for both parties and help them accomplish the respective goals.
Ask Your Vendor For Referrals
The same way you are referring your vendor to other businesses, you can also expect the same from your vendors to do the same as well.
The only thing you need to do is ask them!
If you are a seller with very one or very few categories, it is more likely that brand owners in your niche know each other.
The contact is always shifting from one company to another but the people are the same, they aren’t losing their network but only adding it.
If you can see your vendor relationship is fruitful and they seem quite happy to work with you, well this is a very perfect time to ask for referrals.
You can tell them to introduce you to their fellow vendors for other products. This is the way you can expand your business.
Be honest and transparent about your intentions with your vendor. Referrals are always better than trying different vendors and finally getting the perfect one.
Decide A Value Together
Remember, it is not about getting to the lowest price of the negotiation when it comes to vendor management.
Don’t put all your effort to bring the negotiation to the lowest price point as with it mostly comes the lowest quality as well.
A better relationship can be driven out when you focus on the quality of the product at a fair price point.
In short, you should aim to come together on a particular value that resonates with you and your vendor both.
Also, you should be already prepared to pay more for the quality you desire. Talk to your vendor on their quality promises and whether they can be specific in the contract as well.
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