Building a great relationship with your suppliers might seem at times like navigating a minefield. The bond between a supplier and its client isn’t exactly sacred, but it shouldn’t be treated as a second-class priority either. While you might regularly purchase goods from a given distributor, it may not be a situation in which they need your business more than you need theirs. They have plenty of other clients, so in order to climb your way to the top of their hierarchy, you have to treat them with respect. Look at them as part of your business family.
Some businesses like to cut corners to save costs, but they shouldn’t, especially when it comes to suppliers. Maintaining a great relationship with a supplier is as essential as hiring a good accountant, as each contributes to the success and growth of your company. To understand why this relationship is so important, let’s analyze the ways in which suppliers can benefit your company:
- Punctuality: A supplier’s turnaround time can limit your inventory, and a limited inventory can negatively affect your revenue. Additionally, having a reliable supplier that delivers on time can positively contribute to your own reliability in the eyes of your customers.
- Quality: Quality materials can make or break your product. If the quality is good, customer satisfaction increases, and returns decrease.
- Ingenuity: Suppliers focus on the quality of individual elements as well as the efficiency of manufacturing, whereas your focus addresses your brand and its offerings as a whole. As suppliers are targeting avant-garde creation for their products—something you need—the supplier can help you maximize the potential and expedite production for your new product, both of which can save you time and money.
- Monetarily: When you are ready to begin growing your business, suppliers are a great resource for financial assistance. This can be in the form of a loan, an investment, extended terms on purchases or even postponed debt.
As suppliers can have a drastic impact on your business, it is in your interest to keep them happy by respecting how they view your transactions. Sometimes you may need them to go the extra mile. In these instances, your supplier will only go out of their way to accommodate your request if they already feel respected. This is not to say you should be a pushover. Be firm in relaying your needs, but in doing so, be fair. Review the following ground rules to ensure your supplier will be satisfied with your partnership and that the relationship is beneficial for both parties.
1. Pay on Time
There is nothing that cripples a relationship quicker than not paying your bills on time. Once payment terms are in place with your supplier, don’t abuse the conditions of the deal. Flexibility is not an option, even if the supplier has been flexible in their delivery. If you pay on time, the supplier will be much more inclined to deliver in a punctual manner. If you happen to find yourself in a bind and can’t fulfill your payment, don’t skirt around the issue. Promptly reach out to the supplier, and be sincere about the situation and honest about your ability to pay. This will be your only saving grace. With that being said, you should always pay on time. A supplier’s cooperation and offerings soar when the buyer abides by this rule.
2. Build the Relationship
Though telephone and email communication is today’s norm, you should break that trend when it comes to your suppliers. Drop by their offices, and invite them to yours. Include them in company events. The more you take advantage of these face-to-face opportunities with your suppliers, the more appreciated they will feel. In return, they may be willing to work harder for you. If they feel a personal connection, you will inevitably be at the forefront of their minds.
3. Give Favorable Lead Times
Choosing and managing a suitable “lead time,” or the time between you placing an order and receiving it, is about realizing the needs of both your company and your supplier. You want the product as fast as possible, because a quick turnaround means less inventory bubbles and faster product availability. But on the supplier’s end, your order is likely one of many orders from multiple businesses. Find a balance between your hunger for a fast delivery and their desire not to be overwhelmed. You want to give them as much lead time as you possibly can. Occasional circumstances sometimes arise that require you to place last-minute orders, and that’s typically okay; just don’t make it a habit. If you take the time to understand the needs and production methods of your supplier, it will help in recognizing how to appropriately play your cards.
4. Keep Them in the Loop
You can show suppliers that you value your relationship by keeping them updated about your business. Not only does this affirm a sense of collaboration between you and your supplier, but it also implies that you see them as one of your own. Update them if your company’s point of contact changes, if your products are selling well or poorly, if you think the process can be improved, etc. Another benefit to sharing this information is that it provides them the opportunity to look for new ways to service you. Additionally, if you share potential strategies, such as running a promotion that could escalate your volume of sales, the supplier can take preparatory measures to meet larger demand.
Keep in mind that suppliers can be some of your greatest advocates. If you treat them well, they might even open up their database of clients to your business. Translation: “More customers for your business. More money for both of you.” The rules for building a great relationship with suppliers are not complex. Be respectful of their needs, and they’ll be respectful of yours.