A thriving small business cultivates strong, healthy relationships with customers and employees. Sometimes, however, small business owners overlook the value of maintaining positive relationships with another component on whom they are completely dependent: suppliers. For a business to succeed, it is very important to understand the needs of the suppliers and that they fully understand the business owner’s goals and expectations for quality customer service.
A solid relationship based on trust pays off in many ways, such as:
- Supplier willingness to go the extra mile in a tight deadline situation
- More favorable position to ask for discounts when buying in bulk
- Supplier is more likely to refer business to you
Here are six tips to ensure you and your supplier establish and nurture a healthy relationship:
1. Pay your bills on time
Just like you, suppliers, product manufacturers and wholesale distributors depend on timely payment for goods and services. For vendors working on low margins, cash flow is essential. When you pay on time and respect the agreed terms, you show appreciation for their contributions. In this way, your business achieves a “most reliable” status in the eyes of the supplier. This is useful if you need to order the supplier ahead of time for deliveries or other special requests.
2. Make sure the vendor understands your vision and goals
A supplier that understands your business is far more valuable than those that just follow the order flow. Take the time to communicate your short-term goals and where you plan to take your business in the future. Ask for suggestions on the role suppliers can play in achieving these goals. A trusted vendor will likely have unique industry insights and offer helpful feedback you won’t find anywhere else.
Keep your supplier informed about planned product updates or new releases. Invite suppliers to participate in strategic meetings or simply show them around the office so they can get to know your business better. Consider visiting their place of business and also learn more about how they operate.
3. Appoint a dedicated supplier manager
In most cases, the relationship works most efficiently when the supplier has a single point of contact within the company. Assign this role to one person and be responsible for ongoing communications (phone, email, site visits). Under this agreement, the supplier can quickly access an answer to questions regarding inventory, delivery, etc., rather than wasting time trying to locate someone with the authority to make a fundamental supplier-related decision.
4. Find out what the supplier needs from you
A strong relationship needs to be a two-way street. When you understand how a supplier operates, the process goes more smoothly. Make sure you fully understand the payment terms and types of documentation the supplier requires, as well as their preferred channels and ordering and delivery times. Adjust your orders to meet these preferences and provide as long a lead time for orders as you can.
5. When mistakes happen, don’t point the finger at anyone
Occasional problems are inevitable in processing or delivering an order. Your relationship with the supplier will be strengthened if, instead of pointing fingers and apportioning blame, your dedicated supplier manager works with the representative on the other side to clarify the situation and take action to ensure the problem does not reoccur.
6. Indicate a trusted supplier to third parties
When a potential customer you refer contacts the supplier, the supplier’s loyalty to your company becomes even stronger. This is a way to convey your appreciation for the vendor’s services, and it’s likely that the vendor will return the favor with a referral in the future.
Companies that see suppliers as partners, rather than just another operational necessity, enjoy a competitive advantage in the marketplace. Thanks to the developed relationship, they can count on suppliers to offer the best price deals and in periods of high customer demand. In these situations, everyone wins.