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The Importance of Long-Term Supplier Relationships
THE SOURCE CODE BLOG
One aspect of business that’s proven consistent no matter the economic environment, are the benefits derived from building long-term supplier relationships. Think of your own personal life. When you have a problem, who do you turn to for help? In most cases it will be your family and close friends. Well, the same principals can be said for your B2B relationships. Like a close friend your supplier can be there to help and support you through whatever crisis you’re experiencing.
In friendship as in business, when you enter a new supplier relationship the end goal should always be both long-term and mutually beneficial. Unfortunately this step is often trumped by today’s prevailing mindset which is to say “if this supplier can’t produce what I’m looking for than I will find one that will”. And while to some degree this mind set is correct, it is a terribly inefficient process that only creates a negative image of how your company operates.
Alternatively, by starting off the relationship with the intentions of creating loyalty and alignment, you’ll find it much easier to develop a reliable supplier. Through being dependable and trustworthy, your supplier will be more inclined to offer you better payment terms, priority manufacturing status, orders on consignment, discounts or rebates. Ultimately treating your suppliers with respect is the key to developing long-term mutually beneficial relationships.
Here are a few suggestions you can use for yourself when starting new relationship with a supplier.
- Be up front - Don’t mislead your new supplier to garner a better price. There is no long-term gain by telling a little white lie. Instead, tell the supplier what your marketplace looks like, the challenges you have and exactly how much you’re prepared to buy. The more transparent you are the more the supplier will understand your challenges and be prepared to help you in your efforts to gain market share.
- Treat suppliers with respect - Treating suppliers disrespectfully at any point during the relationship can engender loyalty. However it’s particularly important to treat suppliers with respect right from the start. Remember, most suppliers are inundated with hundreds to thousands of messages from prospects who are just “kicking the tires” looking for a way to take advance. Show them you want to be there for the long-term and build a strong relationships right from your very first transaction.
- Be patient - An important factor in building a relationship is patients and understanding. When starting with a new supplier there will be mistakes made and problems to work through, guaranteed. When this happens don’t run for the hills or switch to the next guy. Tell your supplier it’s a stumbling block but we will turn it into a building block and move on.
- Go beyond - An ideal way to keep in your supplier’s top slot is by exceeding expectations and providing services that are not expected. When the opportunity arises help the supplier become better at their craft by educating or showing them how improve their processes or manufacturing capability.
- Pay as close attention to your supplier as your bottom line - Be as close and connected to your supplier as you can be. Because in most industrial commodity markets it’s not what you sell it for but rather what you buy it for that makes the real difference to your bottom line.
That’s it for today. Stay tuned for the next weeks post.
(For more than 10 years, GCP Industrial Products has successfully offered its customers a unique sourcing process that allows them to save money, streamline their supply chain and grow with new products. Our plans are to continue to grow based upon mutually beneficial relationships and the quality of our products and services to our ever growing customer base. To contact us please click here or phone 1-888-893-5427. Thank you.)