Working with external suppliers: 6 things you need to remember
In almost every business, you will need to work with external suppliers of some kind. They may be providing you with material goods, such as retail stock or components for your company’s manufactured items, or services, such as tech support or skills outsourcing.
Regardless of the reason and capacity for your external working relationship, there are some things you really need to keep in mind when working with any external supplier.
As always, you need to remember that business is about people. The suppliers that you’re dealing with are people, not some faceless corporation, and the more you invest in creating quality relationships with your suppliers, the better off you’ll be.
With that in mind, here are 6 tips that will help you work with your suppliers to achieve the best outcomes for everyone.
1) Be Realistic
It’s almost impossible to have every single thing you want from an external supplier. You will generally have to compromise in one way or another, and this compromise usually comes in one of three ways: Time, Quality, or Price.
Your supplier, for instance, may provide the highest quality goods, but this will often come with higher prices and slower turnaround times. Conversely, a supplier with lower costs and fast turnaround will likely be offering lower quality goods or service
Be realistic in your expectations of your suppliers. Choose the thing that is most important to you, such as the highest quality goods, and be prepared to compromise on the other two.
If, by chance, you find a supplier who can provide the best turnaround, price, AND quality… Never let them go
2) Pay on time
This should be the first rule of any business relationship. Unfortunately, this simple courtesy is so often overlooked that it needs to be loudly reiterated! To forge the best relationships you can with your suppliers, you MUST pay your bills on time. Keep in mind that they’re running a business, just like you are, and are relying on your payment for positive cashflow.
You will always benefit from paying on time, too. Your suppliers will come to see you as a good risk, and will likely choose to supply you over less consistent payers. Your business relationship will be stronger, and if you come up against your own cashflow issues in the future, your suppliers are more likely to be lenient, and may even offer better payment terms for you.
If you’re ever having issues with payment, make sure you talk to your suppliers as soon as possible. Don’t just ignore your bills, or make late payment a habit, as this will prove to be detrimental to your relationship in the long run.
3) Be transparent
This doesn’t mean you need to give up all your secrets! It’s your business, after all, and you have your own way of running it. It simply means that your suppliers should be aware of where they fit into your business.
Invite them to visit your business, so they can see how you use their product or service. Give them access to your production schedules, so they can understand, and allow for, your peaks and troughs in business. Let them know why their goods or service are integral to your product.
It’s important to remember here that, in most cases, your supplier is not your competitor. They are more like a partner, and it is in your business’s best interests to treat them as one
4) Be honest
If you’re working with multiple suppliers for the same product or service, you don’t need to hide that fact. Honesty is the best policy, as suppliers should inherently understand the need for contingencies, and backup plans. It can also work in your favour by encouraging a little healthy competition between your suppliers.
Honesty is also extremely important if your supplier is not right for your business. Instead of just dropping a supplier, let them know why they’re not up to standard. If it’s possible, give them a chance to improve, or fix the problem.
Open communication is always the best way forward when dealing with suppliers. If they don’t know how their product or service impacts on your business, how can they improve on it?
5) Be friendly
Ask yourself if you would want to be in a relationship (of any kind) with someone you don’t like. The answer is likely to be a resounding ‘NO’! The simple fact is, as humans, we prefer to deal with people, and spend time with people, that we actually have a vested interest in.
Treat your business relationships the same way. Invite your suppliers to parties and functions, and make them feel like they are important to your business. Try to be civil if mistakes or miscommunications’ occur, and work through problems together.
It may seem like common sense, but unfortunately, it’s one of the things that suffers in business. Treat your suppliers well, and they will be more likely to try to help you when they can.
6) Be smart
Don’t leap blindly into a relationship with a supplier. Giving too much unearned trust at the beginning of a business relationship can often result in disastrous outcomes.
Always do your research before you choose a supplier. Find out whether they have a good track record in providing their goods and services, and look at the quality of the other clients they have. Don’t be afraid to ask them pertinent questions about their capacity to provide you with your required goods and services.
Most importantly of all, create a detailed contract. Take into account all the points listed above, and draft an agreement that both you and your supplier are able to comply with. By having everything in writing, from the outset, you will be protecting yourself if any issues come up in the future.
Remember, when it comes down to it, a relationship is a two-way street. Treat your suppliers as you would like to be treated, and you will be sure to benefit.