Your six-step strategy for improving business relationships with suppliers.
Positive relationships with suppliers are critical to business success. That’s a given. The steps worth taking to get are not always as obvious. So how do you ensure effective, long-lasting connections with suppliers? Or makes existing ones #relationshipgoals? Drawing our expertise and real-life lessons, we’ve rounded up our top tips for cultivating better business relationships with better pay-offs.
- Communicate—even when it’s uncomfortable
Keep suppliers in the loop regarding your latest business goals, promotions, or even bad news. An early heads-up is even better. For one, it shows you value the relationship and are enthusiastic about working with them. Second, you do yourself the favor of giving them enough lead time to ensure your stock is always up to date, especially ahead of a big order. It can also help to think of suppliers as an extension of your internal organization to keep communication respectful and trust intact.
- Pay On Time. Every time.
The favorite client is always the one that pays promptly. Respect the conditions you’ve both agreed to and always pay in full. This consistency makes you a reliable customer and more likely to score a favor down the line, i.e., a rushed order or change to payment terms. Utilize vendor contracts that clearly outline terms to keep everyone in check and on the same page.
- Help Them Pay On Time
Sounds like a head-scratcher? Let us explain. Businesses looking to fill a cash-flow gap often sell their outstanding invoices to third-party companies as collateral for an advance (minus a small fee). Known as invoice factoring, the process can turn weeks of waiting for payment into days or hours. Once the client reaches their payment deadline, the money collected goes to the company that funded the invoice. Becoming a funder for a supplier is a great way to help keep their cash flow healthy and add to yours.
- Refer Businesses You Trust
Have an exceptional supplier that would serve a colleague well? Let them know. It’s the best sign of appreciation a supplier can get and creates mutually beneficial business relationships. You’ll gain added value as a trusted source for customers and encourage loyalty from suppliers. Win-win.
- Keep It Real…
…When it comes to your expectations. You’ve heard it before, but it’s easier said than done: over promise and under deliver. Avoid catering to supplier needs that you can’t confidently meet or risk souring your relationship when you don’t. This also means knowing when to say no. We see it all the time, businesses get blindsided by how much they want to secure a deal or opportunity and want to make things work. Next, they realize (often too late) that they’ve set themselves up for guaranteed failure. Save yourself the headache by being honest with your capabilities and taking a pragmatic approach.
- Remember, Not Every Deal Will Work
Your business needs to make money. So when it comes to negotiating pricing, don’t fear pushing back if the opportunity isn’t meeting your set goals or margins. Voice your concerns from the get-go, stay calm, stay professional, and walk away when you need to.