Wednesday, July 6, 2011

Maintaining Good Vendor Relationships

Maintaining a good relationship with your vendors is crucial to your business. Some ways to maintain good vendor relationships are described below:

Explain your business goals
It’s critical at the start of any vendor relationship to communicate your goals, business vision, and your expectations. When a vendor understands how important customer service is to you, for example, they will be encouraged to work harder in that area. Knowing your goals will help them make the best decisions in your favor.

Assign a dedicated manager
Select a team leader or project manager to keep track of each vendor. This manager should check in with frequent phone calls and site visits to solicit feedback from the vendor. Remember: phone calls are more personal than e-mails, while site visits will go even further to bolster your confidence in the vendor and let them know that they are an important part of the team. This person should respond to any vendor questions and concerns promptly and make sure to keep the lines of communication flowing.

Request progress reports
Schedule periodic and detailed progress reports from the vendor. These reports will give you a clear insight into how the business is growing, bring to light any glitches or problems early on, and allow you to resolve any issues before they become big problems.

Plan in advance
It’s important to respect your vendors’ time and resources. Delays on your end or last minute alterations can affect their profit margins and strain the relationship. Similarly, pay on time and if you can’t, explain to the vendor why, reschedule the payment, and don’t flake out again.

Train vendors to meet your needs
Don’t assume that vendors know your company’s unique needs. Determine if training might be necessary. The additional expense will be worth it.

Be reasonable
Low balling your quotes and expecting something for nothing is a bad way to maintain a good vendor relationship.

Show loyalty
When you’re loyal to your vendor by consistently giving them business and sticking with them through mistakes, misunderstandings or miscommunications, they may return the favor by offering discounts and incentives. If you are considering alternative vendors, under no circumstances should you let your current vendor know that. It may seem like a good way to negotiate for lower prices, but you risk your vendor feeling slighted.

Show some goodwill
Don’t get into the habit of asking for outrageous requests or favors from your vendors. But when you do occasionally, show some good will by offering some easier jobs, throwing them more business, giving them referrals, and understanding that they may not always be able to accommodate immediate or unexpected requests.

Be chummy
Don’t be afraid to be friendly with your vendors. Try not to make every communication with them a serious one. The more you get to know their team and the more they think of you as a friend, the more good will they’ll be willing to show you when you need it.

Put It Down In Writing
Put down everything in writing- responsibilities, expected sales volume, payment, mode of payment etc. Anything you think may cause misunderstanding and strained vendor relationships later must be put down in writing beforehand.

Vendors represent your business to customers in various regions. Therefore, it is important that you maintain a good relationship with them. More than that, a good vendor relationship will see you through in a bad situation. The goodwill the vendor has for you will translate to business growth, as the vendor will work hard to attain your business goals.

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