No matter what size your business is, managing vendor relationships is key to its success, allowing you to build positive relationships with suppliers and get the right price for the goods and services you buy.
1. Cost vs. quality
The right price is not always the lowest price. It’s the one that provides you with value for money in return for a high-quality product – something your customers are likely to prefer. Ask vendors to provide detailed information on their products so you can understand their worth, not just the cost.
You’re more likely to get a good price from vendors if they feel that they’re building a long-term relationship with you that will benefit not only your business, but theirs as well. Let your vendors know that you are committed to working with them and won’t switch suppliers without talking to them first.
3. Win-win agreements
When you negotiate with vendors, make sure you know the outcomes they want to achieve, as well as your own goals. This way, you’ll find it easier to agree a deal that works for both of you. If you only look at it from your point of view and don’t give at all, the vendor may walk away from the deal, which won’t do you any good in the long-run.
4. Good practice
Once you’ve got agreements in place, it’s important you manage them, and your relationship with your vendor, well in order to ensure it runs smoothly. If you don’t already have one, start using a vendor management system such as https://www.contractswise.com/ to help you securely store contracts and track performance against them.
5. Share information
When you work closely with a vendor, you’ll get more out of the relationship if you let them know your business priorities and future plans. These don’t have to be detailed or break company confidentiality, but should be enough to allow vendors to identify ways that they can add value and help you achieve your goals.
6. Understand your vendors
Getting to know your vendors is a good way to build long-term relationships that benefit both organisations. Find out about their business plans, what they want to achieve and growth plans – they might be introducing a new product line, for example, that you’d be interested in buying.