Vendor Relationship Management
How to Build A Strong Relationship with Vendors
Establishing a good vendor relationship comes with not only a reliable source of supplies for your business. It also entails getting your supplies on time, boosting customer satisfaction, getting more business, enjoying better deals and customer support, and saving money. And it all starts with being clear about what you need your vendors and communicating with them properly. This is what effective vendor relationship management is all about, referring to reaching a deeper level of buyer-supplier relationship for the mutual benefit of both parties.
Set Clear Expectations
Think about what you need a potential supplier to deliver, from the pricing and quality of the product to the timeliness of the delivery, level of communication, and after-sales service. Ask your vendors to give their expectations of you as well. Such a discussion will provide you with a clear view of each side’s strengths and weaknesses, allowing you to set realistic and achievable goals together.
Get to Know the Vendors
In any relationship, it is important to know the other party. It works the same way if you want a productive vendor relationship management. Think about organizing social events to meet your vendors. It could be dinner at a nice restaurant, a drink at the hottest bar in town, a match at a bowling alley, or even a karaoke session. This is why you’ll find business people at golf courses. Business deals and getting-to-know-each-other meets are not supposed to be limited to the corners of the office.
Establish a Partnership
Treat vendors as a valuable partner in your business. Instead of merely giving them goals that you want them to meet, involve them in making strategic decisions involving your relationship. They will not only provide you with their product and expertise but also show you preferential treatment and a stronger sense of trust as well.
Look Out for Your Vendors’ Businesses
A good relationship should provide both parties with a win-win situation. The vendors help you operate your business smoothly by delivering what you expect of them. In return, refer potential customers and opportunities to your vendors and help them grow their business, too. Establishing this kind of mutual relationship is a solid step towards building a strong vendor relationship.
Use a Reliable Vendor Management Software
Vendor management software allows you to store all vendor-related information in one application. You can use it to create, manage, and monitor all the purchases made with the vendors. This makes vendor relationship management easier to do as well since you can also track their performance and check if they still meet your expectations and the goals you set together.
Help Vendors Address Issues
If careful vendor management has shown you problems from the vendors’ side, don’t abandon your agreement in search of a replacement vendor. Instead, tell them what these problems are that might affect your business and give them a chance to resolve these issues. You can assist them in doing so, especially if you have the resources to help. Doing so will not only foster a stronger relationship but one that is full of respect and trust as well.
Give Timely Payments
If you want to retain a good relationship with reliable vendors, pay them on time. Delayed payments often cause relationships to go sour. On-time payments show that you respect your commitment to them and their hard work. If a delay is bound to happen, inform the vendors about it and tell them a clear timeline of the payment. In the same way that you use a vendor relationship management application to see if your vendors delivered their products on time, they expect the same thing regarding their payments, too.
Everything that you have agreed upon in building a relationship with your vendor should be in writing. These include expectations, responsibilities, expected orders, agreed best practices, payment invoices, issue resolutions, and more. While you might have verbal discussions, make sure to put them in writing by jotting down the minutes of the meeting and sending follow-up emails. Proper documentation can help prevent miscommunication and misunderstanding, as well as track where the mistake came from in case a problem comes up.
Developing a strong relationship with your vendors take time and effort. It requires more than just increasing your orders and giving them more business. You need to have a proper strategy, clear lines of communication, and the right tools, such as vendor relationship management software. If managed well, you can have a long-term and win-win relationship with your vendors.
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