Having a good relationship with suppliers and partners means everything in business. Read our tips on working and managing them effectively.
Build a relationship
It always pays to spend time building a good relationship with the people you work with and suppliers should be no different. Just as with your employees in the workplace, understanding the needs of your suppliers can help you get the best deals. If they know you and their sales targets are looming you might find that you can get better payment terms or bulk discounts.
It can also be a good idea to introduce prospective customers to your suppliers. Creating a network of people you’ve introduced will help keep them on side and could also mean you are rewarded with introduction discounts.
There’s more to life than price
Choosing the cheapest suppliers is the downfall of some businesses. Although price is one of the most important factors, you may compromise a good service for bargain prices. Getting the best from your suppliers means getting the service you require at a reasonable price, however it’s often the case that low-cost and poor quality goes hand-in-hand.
Whilst it is tempting to go cheap and strike an amazing deal with a great supplier, be realistic. Take a look at a price list before you speak to anyone and calculate how much you can afford to pay against what they are asking. Don’t forget that if you don’t ask you don’t get, so see if in exchange for a greater cost they will throw in services for free, for example extended payment terms or lower delivery charges.
Know what you want
When building a good list of contacts it’s crucial to understand the difference between strategic (one that provides essential goods or services for your business) and non-strategic suppliers (a provider of low-value goods).
When it comes to researching your strategic contacts it’s key to look at everyone and find out their strengths. Quality and services may be something to compromise on if you’re dealing with a non-strategic supplier, but it’s reliability and value that you need when it comes to your most important suppliers. Don’t feel you are insignificant; as a small firm your business can be just as important as any other company so keep hold of what you believe are most the most important objectives and if your suppliers can’t meet your demands don’t be afraid to walk away.
Review
One area businesses often fall down on is reviewing their suppliers. One of the best ways to review the services you’re getting is to write a list of how much you spend with each supplier and identify areas where you are unhappy or where you should be getting better value. Once you realise how many suppliers you have it may encourage you to consolidate them to help reduce costs.
If your suppliers are no longer meeting your objectives organise a meeting and ask them how or if they can help as soon as possible. No matter how many reviews you have, it’s always crucial to do your research. Finding out the prices and services of the competition will give you a great starting point for discussing your current contract. Without your facts and figures how can you make a comparison or haggle for a better deal?
Time for a change
Don’t feel like you are tied to any of your suppliers. If they no longer meet your needs or fail to give you the value you deserve they are no help to your business or your bottom line.
Whilst it’s the easiest thing to end a contract, finding a replacement requires much more research and planning. Don’t be tempted to burn your bridges just because you’re changing suppliers - you never know when you might need to call on them for a favour.
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