Strong Supplier Relationship Means Strong Profitability

Strong Supplier Relationship Means Strong Profitability

There is a lot written about creating a good relationship with your customers. By establishing a relationship, you build trust. That trust and knowledge of your customer allows you to serve them better, get your orders right on the first try and often creates regular repeat business. This type of bread-and butter-business gives your company stability and keeps you profitable.

The same can be said on the other side of the equation, your relationship with your vendors. In this case, you are the customer; however a strong relationship with your suppliers will give your partnership a solid footing. If your vendor can anticipate your needs, they will have stock ready to go when you need it, and they will work harder for you in special circumstances. A strong supplier relationship means that your profits will stay strong because your vendor will work with you instead of against you.

How can you build a strong relationship with your supplier?

Like any relationship, a supplier relationship is built on trust. Trust has to be earned over time. Of course, the relationship is a two-way street. You need to trust your supplier too. However, there are ways that you can build your relationship actively and build the trust at the same time.

Keep Your Supplier Informed

If you know of orders coming down the pike, inform your supplier with plenty of lead time to have your orders filled on time. If changes come along in the mean time, you can continue to stay in touch with your supplier on a regular basis to make them feel part of the loop. If they know that you will keep them up-to-date, they will trust your word.

Meet Them in Person Periodically

If your supplier is within your travel range, then meet with them in person periodically. Not all of these meetings have to be in the office. Meet them for coffee before work or a beer after work. Meet them at a local sports game. While the Internet, email and texting is great, there is still something special about a personal face-to-face meeting that helps build a relationship. If you can’t meet them, another option is to talk to them via video chat from time to time so that you can see each other’s face.

Understand their Process

Take the time to understand the big picture of how your vendor creates your supplies. This can mean touring their plant, reading their whitepaper or meeting with their engineers. The more you understand how your vendor does their job, the more they will respect you. Additionally, you will have a better handle on how to use the vendor and their products. This knowledge pays off on the customer end because you will be able to better fulfill all of your promises to your own customers.

Pay on Time

Paying vendors on time does two things.

  1. It makes your vendor happy. Everyone loves to get paid. Getting paid on time is even better. Many vendors offer discounts if you pay on time, because it means that they can pay their own vendors on time.
  2. You will pay less. You may get a discount for paying on time from your vendor. A discount means that you pay less, and make more money on your sales. You also do not get charged interest which digs even farther into your profit.

Work with Them on Cutting Costs

If you have a good relationship with your vendor, you can work with them on cutting costs where possible. If your costs are lower, you can either pass that savings to your customers or you can earn a higher profit. To learn more about how to improve supplier relationships, contact Supplier Works.