Mend the fences

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Improve your relationship with your supplier by following these 10 tips.

May 3, 2013

One of the keys to success in any green industry business is the relationship your company has with its suppliers. They influence how well you can provide products and services to your customers. Make no mistake, if you are going to build a profitable business, you will need excellent relationships with your suppliers. This has proven successful in Japan where they build a supplier “Keiretsu” which is a network of close-knit vendors to improve their products and services. Studies show that over a long period of time, businesses that have strong supplier relationships will increase their customer sales and profits.

Here are 10 ways to accomplish this:

1. Determine requirements for every supplier.
Establish the standard that every supplier needs to meet. Remember that cost is only one reason for determining a supplier. Document expectations like order quantities, payment dates, and delivery schedules. It is acceptable to be demanding as long as there is agreement. Understand the value of the relationship for your company and that supplier.

2. Establish shared values. Look at the supplier’s mission and vision statement. Research their actions and reputation in the marketplace. This can be done through search tools on the internet or using social media tools. Their actions should match your company values. Establishing trust early in the relationship is a key factor to its success.

3. Treat them like a customer. Form a personal relationship, which means calling them on a regular schedule even if there are no immediate issues. Go visit them if possible because nothing replaces in person meetings.

4. Get employees involved with the suppliers. Form many types of relationships with a supplier so there are multiple points of contacts in case employees leave either business. Relationships are a function of how well the employees work together, not just the owners of the two companies.

5. Pay within terms. Suppliers watch their cash flow just like you. They value customers that pay on time. Stick to what is agreed upon up front or give plenty of notice if those terms need to change.

6. Make their job easy. Order as instructed by their process and be known as the company that is easy to work with.

7. Establish a process for resolving conflicts. What happens when there are late deliveries, returns and other situations that impact sales with your customers? Ensure that a communication process is established in advance of any of these issues.

8. Give a supplier more business. Look at your purchasing reports to determine if you can consolidate vendors by giving the great companies more of your business. Try to be a bigger fish in a smaller pond for maximum impact.

9. Share information about your company and other industry news. Treat suppliers like true partners by sharing changes with your customers. Brainstorm with them to resolve issues facing the industry.

10. Identify the most critical suppliers for your business. Just like your best customers, treat them favorably. This may include better terms and expedited problem resolutions.

How do you build close relationships with your suppliers in your profitable business?


Barry Moltz gets small businesses unstuck. He has founded companies with a great deal of success and failure for more than 20 years and is the author of four small business books and a contributing journalist to American Express Open Forum and Forbes. He hosts a weekly radio show for small business owners.