Managing Vendors and Suppliers

Quick Summary
It’s pretty much impossible to grow a small business without relying on qualified vendors and suppliers – relationships that can drive how quickly you’re able to grow your company. Of course, you’ll need vendors to provide computer hardware and software, office supplies, insurance products, and banking services. However, you’ll also rely on relationships that are specific to your type of business. These include:
 
  • Manufacturing, where suppliers provide a steady supply of raw materials or components.
  • Retailing, which requires that you maintain an appropriate level of inventory or risk losing customers.
  • Service businesses, where you may need supplies, machinery and equipment to help you serve your customers.
For each need, you’ll need to make sure you select the right vendor, and manage the relationship to assure prompt and reliable shipments and that you get an appropriate level of service and support. But you’ll also need to prepare for contingencies – such as if a vendor relationship deteriorates or a supplier goes out of business.

Establishing Vendor Relationships

One fundamental strategy for enjoying good relationships with vendors is to select the right ones in the first place. You’ll need to do a fair amount of research to find candidates and create detailed business requirements so prospective partners can provide accurate quotes. It’s also essential to select not just one main vendor, but others that you can rely on if your primary vendor can’t deliver.

Maintaining Effective Vendor Relationships

Just as you expect to develop long-lasting relationships with repeat customers, you’ll want to do all you can to keep the relationships between your company and suppliers productive and successful. Issues may surface from time to time, but by working closely with your vendors, together you can solve many of your business challenges and help each other’s businesses grow.

When Things Go Wrong: Ending Vendor Relationships

Sometimes vendor relationships decline for a variety of reasons. Supplies don’t get delivered on time, the quality of the materials does not meet specifications, or vendor support deteriorates. In some cases, a supplier may be facing their own financial difficulties, even bankruptcy. Ending a vendor relationship can certainly impact your business, but there are steps you can take to minimize disruptions.
 
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