3 Practices that Help Small Businesses Profit from Vendor RelationshipsJun 14, 2021
How to maintain good relationships with vendors?
Conventional wisdom in business usually encourages entrepreneurs to place a lot of focus on customer relationships. This is perfectly fine considering sales revenue depends heavily on customer traffic. However, if a company manufactures and sells tangible goods, it’s equally important to establish good relationships with vendors. Customers might be necessary for sales revenue, but vendors are crucial for stable inventory.
Business Relationships are a Balancing Act:
Setting up good relationships with vendors all boils down to one word. Professionalism. As long as a company can synchronize well with its vendors, it becomes easier to practice high standards of quality control. Executive Director Nicole Marie Richardson suggests that “It's critical at the start of any vendor relationship to communicate your goals, business vision, and your expectations... Knowing your goals will help them make the best decisions in your favor.”
Here are a few tips on how to create beneficial vendor relationships:
1) Open Up Lines of Credit
In a perfect world, it would be possible to guarantee that all the raw materials obtained from a vendor would automatically translate into sales revenue. But customers are unpredictable and often seasonal. This is why it’s helpful to work with vendors who are flexible enough to extend credit or barter trade. Any amount of leniency you can build with a vendor reduces the pressure to spend cash.
2) Ask for Preferred-Client Discounts
One of the perks of working with vendors over time is the ability to build mutual trust. When vendors transact often with a client/retailer, there’s a certain degree of trust which starts to form in the relationship. This makes it easier to negotiate discounts or bargain-prices on orders. The longer the relationship lasts, the more such discounts bear fruit.
3) Be Punctual
Keeping good time is a very important ingredient of strong vendor relationships. The more a company transacts with vendors in an orderly fashion, the less uncertainty there is for all of the stakeholders involved. Avoid sloppy mistakes like postponing purchase-orders till the last minute, being overdue with payments, missing logistical appointments and so on.
The more steps are involved in a company’s manufacturing and distribution, the more important it is to ensure that supply chains don’t get disrupted. The most efficient way to accomplish this objective is to have good relationships with vendors. The more goodwill a company can accumulate with vendors, the more attention can be given to streamlining the customer experience. If you like what you just read from our blog, you’ll love the various informative courses, workshops and events listed on our websites and social media. Whether you’re interested in personal development, or overall improvement of your business, give us a call at 1 (888) 823-7757 to find out how The RISE Academy can help you break past your daily struggles and start soaring in success. For business development coaching by Richard Martinez, call at 626-202-2291 or follow us on Facebook and Instagram.
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