Business

The Keys to Strong Vendor Relationships

 

Many have said that businesses would be much easier to operate if it weren’t for all of the employees, customers and vendors that need to be dealt with every day. While the infographic featured alongside this post might not solve all of your organization’s issues, it certainly should steer you in the right direction with regards to vendor relationships. 

No matter the scale or scope of your business, your vendor base is likely crucial to your success. Small businesses establishing their first set of vendor relationships, or large-scale businesses with hundreds of vendors with complex requirements, this resource will provide some insightful information as to how to establish a lasting vendor base that can create a competitive advantage. 

Perhaps you may have thought that a smaller vendor base was a safer bet in regards to gaining a competitive advantage in your industry. However, this is not always the case. Organizations that have excellent vendor relationships often get the most favorable pricing treatment, the most thorough maintenance and service, in addition to new product offerings as soon as they become available. All of these advantages pave the way to increased profit margins, better customer relationships, and even more positive online reviews and sales leads. 

The problem that a majority of companies face is that they often overdo it when it comes to their vendor relationships. Unfortunately it is very easy for personnel to undermine vendor relationships, whether they mean to or not. This can happen as a result of not being mindful of the details of an arrangement, smothering, or even just creating a hostile environment. 

The two most common problems that plague vendor and organizational relationships come from both sides of the negotiation spectrum. On one side, businesses that negotiate too harshly in their favor give vendors the impression that you’re trying to take advantage of them. There’s no reason for them to work alongside your organization if it only means breaking even. On the other side, businesses that don’t negotiate much at all with regards to their vendors are much more vulnerable to being taken advantage of. In these scenarios, your business likely will lose out to the competition. Finding a healthy balance between both parties is key. 

For the organizations that have complicated requirements as a result of industry compliance standards, curating a vendor relationship can be particularly difficult. In situations like these, it’s best for businesses to suggest a compliance management system to their vendors. These systems are meant to simplify the process for your vendors, making it easier for them to help you while working to meet all the necessary requirements. While these systems might not be cheap, it’s the best option to fortifying the partnership you share with your vendors. 

If you’re looking for more tips on vendor relationships, be sure to review the infographic coupled alongside this post. Courtesy of Smyyth.  

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