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Thursday December 3, 2020

updated - December 3, 2020 Thursday EST

5 Reasons Why Businesses Should Cultivate Excellent Vendor Relationships

Nov 16, 2020 11:27 AM EST | By Ernest Hamilton
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5 Reasons Why Businesses Should Cultivate Excellent Vendor Relationships
(Photo : 5 Reasons Why Businesses Should Cultivate Excellent Vendor Relationships)

If you own or operate a business that manufactures a physical product, or multiple physical products, you know how critical vendor relationships are. You're vendor-reliant because you need the various raw materials or components that make up your finished products. Without those vendors, the system would break down quickly.

There are several reasons why you need to get along well with your vendors if you want to remain successful within your niche. Let's talk about some of those right now.

If You Have Reliable Vendors, It Saves You Time

One reason why your relationship with the vendor should take precedence is that if you know you have reliable vendors in place supplying you with the components you need, you don't need to get that component from multiple sources. You always know from where it is coming. This saves you time.

You can use that time to:

  • Do marketing strategy work

  • Develop and test new products

  • Hire new employees

As a business operator or owner, you know you always have more work to do. If you have reliable vendors, that is one less thing about which you have to worry.

If You Know Your Vendors Well, They Might Give You a Discount

Business is all about the relationships you make. If you work with a company long enough, and you buy from them regularly, you'll probably come to know the faces and names behind that company. It won't just be a faceless account.

If you get to know a vendor well, and you give them consistent business, they'll probably be willing to provide you with better deals before very long. That is because:

  • They want to retain you as a client

  • They're incentivizing you staying with them over their competitors

The longer you work with particular vendors, the better it is. Your business could be around for decades, and you might use some of the same suppliers that whole time. These relationships help both companies thrive. You can both grow and enjoy success in your respective niches.

It Holds Them Accountable

If you know a vendor and the face and name behind your component shipments, it makes supply chain errors less likely. If you can call up that vendor at any time, and you know each other well, you can hold them accountable more easily.

If a shipment of something goes missing or it's late, they know you're a valuable, long-term client, and they'll likely reach out to tell you that something has gone awry. If you always use different vendors, you probably won't have that accountability.

Also, if you know the vendor well and have worked with them for years, they'll tell you about any policy changes in advance. If they are restructuring their company, they'll let you know about it. They'll let you know if prices are changing and why because they want to retain your business, and they feel like they owe it to you.  

It Keeps You Competitive

If you use the same vendor for many years, and you give them tons of business, they'll want to keep you happy, so you keep buying from them. If they ever have supply chain issues or they increase their prices on you, they know you'll probably go with a competitor.

They don't want that, so they'll likely keep prices low for you if you keep buying from them wholesale. They might grandfather in certain product or component prices they would not give someone else.

As a business owner, you have symbiotic vendor relationships. If they're smart, vendors realize this, and they'll go out of their way to keep you happy.

They Will Tell You About New Products and Technologies Before Anyone Else

You might start a vendor relationship by buying a particular item from them. However, as time passes, they might begin offering new products or services. They may implement new technologies that get the products or components to you faster and through more secure methods.

They will certainly tell you all about any new policies, products, or technologies they develop. They'll want to sell you more products and services, and you might want to buy some of them. This is another way you can grow together.

Often, businesses are only as successful and they only get as far as their best vendor relationships will carry them. If you don't have successful, proven vendor relationships in place, it's hard to keep producing the products and services that your customer base enjoys.

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