By Wes Wernette
The conventional thinking about the relationship between small businesses and vendors is that small businesses call the shots. After all, they’re the ones writing the orders and generating business for suppliers. The truth is, if you’re a small-business owner, you need good, reliable vendors every bit as much as they need you.
Bob Reiss, author of “Bootstrapping 101,” outlines several ways a strong vendor relationship can benefit your business:
• What vendors provide directly affects the quality of your product. The higher the quality you provide to customers, the more sales you’ll probably make
• The timeliness of their delivery lowers the risk of inventory obsolescence. When vendors deliver their supplies in a timely manner, you’re better positioned to sell in proportion to customer demand — which in turn lessens inventory and reduces cash needs.
• A good vendor offers you a competitive advantage. Vendors are experts in their business. With a solid vendor relationship, you can be privy to product updates and technological breakthroughs before your competitors learn about them.
There’s an additional reason for forging a long-term relationship with your vendors. People naturally like to do business with people they like. “When you take the time to make friends with the folks at a supplier, placing an order over the phone is not just a business call, it is a chance to enjoy some good conversation,” says marketing expert Armando Roggio. Also, he notes, “Having friends at a supplier can provide access to products with low availability or even earn better prices.”
What can you do to enhance relationships with your current vendors and those you hope to partner with in the future?
Share strategies and information.
A vendor who’s informed about your business and understands your long-range objectives can be a valuable ally. When appropriate, share information about your marketing strategies and keep vendors updated on changes within your company — from new hires to the results of customer surveys, and so on.
Knowledgeable vendors often possess keen insights into your industry. For example, businesses that deal with cash are naturally concerned with protecting their assets through the use of safes, commercial locks, multi-location cash-management systems, etc. By maintaining a strong relationship with a vendor specializing in asset protection and loss prevention — these businesses have access to high-quality information about the latest office products and video security equipment, as well as other trade developments that can help protect their holdings.
Accept occasional vendor mistakes and move on.
Even the best vendors miss a deadline or submit incorrect documentation from time to time. Assuming this happens very infrequently, don’t lose patience with the vendor representative. Focus on working together to come up with a solution. Responsible vendors will do their best not to let a similar mistake happen again.
Be a good customer.
Just as you expect a vendor to be responsible for prompt delivery and accurate invoicing, the vendor, too, has expectations of you. A strong relationship relies upon trust at both ends — which is why it’s imperative that you try to be a good customer to your vendor.
Pay your bills in a timely manner (remember, cash flow is as important to them as it is to you). If a payment problem arises, let the vendor know about it. Negotiate fairly and stick to whatever contractual arrangements you’ve mutually agreed upon. Don’t go behind their back with a competitor. Whenever possible, look at transactions with your vendor as a “win-win” for everyone involved.
Building a strong vendor relationship offers many rewards, including confidence in the quality of the supplies you receive, potentially better pricing over time, and payment plans that align with your needs. Most importantly, you gain a partner with a very real investment in helping your small business grow.
About the author:
Wes Wernette currently oversees marketing at FireKing Security Group in New Albany, IN. The company specializes in products and services for cash management and asset protection.