If you’re a business owner, your goods and/or services suppliers are unquestionably a part of your success — or lack thereof. So choosing the best ones and cultivating good relationships with them are absolutely key ingredients in keeping your customers happy and your bottom line healthy. Here are some critical factors you need to pay attention to when choosing and dealing with your suppliers.
Work for Mutual Benefit
A really good supplier can steer you toward the best-selling goods and services — or those with the highest potential — and thereby increase your sales. What’s more, if you’re able to build and sustain relationships with suppliers that are also profitable for them, they’re more likely to work to make sure your business does well too. Rather than risk losing you, they’ll likely come to your aid if your customers ever make difficult demands. A relationship based on mutual trust and reliability is in the interest of everyone.
It’s also important to keep in mind that, just like you, suppliers are in the business of making money. So if you give them a hard time with their bills, ask them to continuously discount goods and services, or don’t pay them on time, they may decide to stop working with you — just as you might decide to break it off with a client that poses too many headaches for you.
Realize too that if you’re new to a relationship with a supplier, it’s unrealistic to expect the same level of attention they give to their tried-and-true accounts. But if over time you can create a mutually beneficial working relationship, you’ll find yourself on the receiving end of a lot of their attention and good will.
Price Isn’t Everything
When negotiating with suppliers, price should never be the sole determining factor — because a low price is of little use to you in the long run if your supplier doesn’t deliver on time, has payment issues, or delivers low-quality goods and/or services. In addition to price, elements you should consider include delivery efficiency, quality and maintenance of goods and services, accepted methods of payment, and any extra services they may offer.
If you’re able to determine how crucial your company’s orders are to a supplier, that can give you a good deal of leverage in the negotiating process. However, driving too hard a bargain may ultimately result in bad feelings and a sour relationship going forward.
Before you enter into a relationship, be sure to do some research into a prospective supplier’s history. Just as you would with potential customers asking for credit, run a background check and ask for references. Find out if the supplier’s other clients are satisfied with their products and/or services and if there’s any history of delivery default, delivery delays, poor-quality materials, etc.
Then be certain to make your needs and expectations very clear regarding all your requirements, from price to quality and quantity to delivery time and acceptable payment methods. As always, stating things clearly in writing from the start will protect the interests of both parties in the long run.