How Well Do You Know Your Vendors?

Posted by travissmith

It’s extremely important to build partnerships with your vendors and those around you who can refer new customers/clients and help increase awareness of your company and branding.

The people you work directly with on your products and services can also benefit substantially when you find success. By taking the time to build relationships with them, you’ll find a whole host of opportunities you didn’t realize were there.

Look for great ways to offer your vendors rewards for helping and supporting you grow your business so everyone can win. One of ways you can do this is by offering to reward them with longer term purchase commitments like 3, 6, or 12 month purchase orders. This can truly create a win-win because you have shown your commitment to your vendor and they can probably offer lower pricing because of the business security you have given them.

Here’s the step-by-step process to putting together a partnership with a vendor:
1. Approach all the vendors you work with and ask about pricing commitments for long term relationships and if there are pricing tiers based on volume purchased.
2. Put together a purchasing plan and look at the pricing and profit margins from their perspective as well as your own. Work closely with them on the numbers.
3. Develop a clear, concise, and easy to track metric that can be used to increase competition between vendors and therefore higher performance levels and lower prices.
4. By ensuring subsequent sales instead of focusing only on the initial sale, you can build a true partnership with your vendors. With pricing tiers you can give away more of the profit from the initial sale to your vendors and make higher profits off the back end purchases. Engage with the vendor on strategies such as:
• Future sales
• Upsell better and more profitable products/services
• Cross-sell to additional products

5. Create long term, lasting, close relationships with your vendors and suppliers to ensure they will be there for you, and you for them, in the future.

Think of all the vendors you work with and the creative ways you can nurture a relationship that entices them to be part of your business. Use their talents, capabilities, and connections and you’ll both be winners.

Putting together an vendor management plan doesn’t have to be a complicated process. Use our GUIDED TOUR to come up with some great ideas and put your incentive plan together for maximum results.