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“Vendors!??” you think.
“Ha! I’m giving THEM business. It’s their job to keep a good relationship with ME!” And while this may be a common knee-jerk reaction, thinking like that is a great way to hasten the failure of your small business.
Because vendors are much more than just an outside source of materials and services. Sure, they keep your business moving, but they can also become a lot more than just a supplier.
“Vendors can become potential business, or at least introduce you to new business,” say Nick Amodeo, a partner in Intrepid Risk Partners, a New York based small insurance firm. “For example, we work with claims companies who work with brokers who put us in touch with a whole book of potential new clients.”
But the value of great vendor relationships goes beyond networking. Amodeo says he’s been able to use vendors’ facilities for small projects and even asked some for legal assistance, which saves considerable money on lawyers.
“They can also bring you to conferences that you want to be at,” he says. “And usually they’ll entertain you.”
The importance of getting along with your vendors is obvious, but how do you go about creating those relationships?
Inc.com recently published a list of 10 ways to establish great vendor relationships. Among them:
And while people these days seem to love lists like they love a good Black Friday sale, Inc.’s advice here is but a good starting point. There is much more to it than that.
The key to any successful relationship is setting the right expectations. So when you first begin the process of getting to know a new vendor, be sure the first thing you do is explain what your business is and what your goals are. Once they know this, they can begin to tailor things like promotions, sales pitches and new products to what is going to help you best.
On the other side, you need to understand what a vendor needs from you. Do they have specific ordering systems you need to use? A payment process that you might not understand? A progress report on how you’re using their products and how they can make them better? If your vendor isn’t volunteering this information, ask them. It will make everything run smoothly.
Once you know so much about each other, negotiations will become much easier. The goal in any good faith negotiation is a win-win, and when you know what will help the other side “win,” offers and counter offers will be much more enticing.
Vendors aren’t like spouses: They need see other people to survive. So understand that while your vendor rep may be working to find you the best deal, he or she may well be doing that for the competition too. Sure, getting better vendor pricing gives you a competitive advantage, but you won’t always be able to do it.
Despite this, staying loyal to your vendors is key in maintaining good relationships. This doesn’t mean staying with the same supplier even if they inexplicably raise prices and cut back on service. But if you have an issue with any of those things, give that vendor a chance to fix it before you give someone else your business. They’ll respond by helping you with discounts and other incentives.
And if vendors are an integral part of what you do, let them help you in the decision making process. That’s not to say you consult with them on what color your office furniture should be (unless they sell office furniture) but if their pricing, delivery schedule and products make a significant impact on your business, then have your rep sit in on relevant meetings.
You see that last tip Inc. gave about “being chummy?” They mean it. Take the time to get to know your vendors outside of work. It’s a basic tenet of sales that people are more apt to help their friends, and even though in this situation the vendor is doing the selling you may still need things from them.
Vendors make it easy for you, too, as often part of their sales process is meeting you for lunch, dinner, a sporting event or other social activity just to build that relationship. And even if you think you don’t have time for stuff like “fun,” look at it as yet another part of working on your business.
No matter whether your vendors are good working partners or become valuable friends, maintaining good relationships with them is almost as crucial to your business as relationships with your customers. And when you realize the advantages, and put thought into getting the most out of your vendors, you’ve already won half the battle. Image courtesy of Stuart Miles / FreeDigitalPhotos.net