The foundation of any great business is trust. First and foremost, you need to trust in your vison, your offering, and your team. In turn, your customer trusts you to deliver the goods or services —with consistent quality, and always on time and budget.
There’s a third element to the trust equation, though, and it’s one that’s sometimes overlooked: your relationship with your suppliers.
If you’re a good customer to your suppliers, you should, over time, enjoy special treatment, such as volume discounts and access to preferential pricing. What’s more, your A-list suppliers will never let you down. Just as you earn their loyalty by ordering frequently and paying invoices on time, they earn yours by respecting your needs and deadlines. There’s comfort and stability for both sides when you reach this level of commitment, respect, and trust.
Quadient Accounts Payable Automation by Beanworks recently hosted a webinar with entrepreneur Roxanne Pettipas, Founder and CEO of Buddy Belts, and invited her to talk about what strong supplier relationships have meant to her and her business success. Buddy Belts manufactures high quality dog harnesses for dogs. Since founding the business in Toronto in 1997, Pettipas has expanded into 25 countries in North America, Asia, and Europe. The company now enjoys annual sales exceeding $2 million.
Click here to watch the webinar recording: Strategies to strengthen vendor relationships and get the best terms
A great supplier is a great partner
According to a 2020 McKinsey report, companies that collaborate strategically with their suppliers see double the profits over their industry competitors. And many firms report cost-savings by strengthening their supplier relationships.
For Pettipas, these statements resonate. “In my business, we're basically making everything — moving from an idea and a concept to production and manufacturing,” she says. “Everything we do starts with our suppliers and vendors. Without them, we don't have a product.”
Especially when she was first getting started, suppliers delivered value not just by providing goods and services, but networks, too. “One supplier would help us do one thing, and they’d refer us to another supplier for something else. That was part of how we grew.”
Be professional about the relationship
Pettipas believes solid contracts work both ways to maintain a strong relationship with suppliers.
“When we started out, a lot was based on verbal commitment,” says Pettipas. “But over time, especially with offshore suppliers, more paper became essential. Sign off on approval processes, delivery, deadlines, and prices. Make sure that you're accountable, and they're accountable.”
Don't make good suppliers worry about getting paid
Pettipas and webinar host Roger Pierce talk about how late or missing payments can really damage buyer-vendor relationships.
When you make an agreement to pay on a certain date, your suppliers are depending on that payment to arrive on time and to be the accurate amount. Late or missing payments are especially painful to smaller businesses, Pierce points out.
Pettipas agrees on this issue. “We’ve never defaulted on any payment in our entire history,” says Pettipas. “We've always been accountable that way. Any time it's been late, it's completely unintentional. And because we’ve built great relationships, we're never penalized.”
Click here to watch the webinar recording: Strategies to strengthen vendor relationships and get the best terms
Explore mutual business opportunities with your key vendors
Pettipas and her suppliers routinely work together to create synergy. “If we have a new piece of hardware, a new material, or a new process, we talk to our vendors and our suppliers about it ahead of time,” she says. “You want to get them involved early, so you’re not waiting till the last minute to try to make something happen.”
“It’s wise to bring your suppliers to the planning table whenever you’re thinking ahead or preparing a big move,” says Pierce. “Your suppliers can likely make your good plan even better — or be able to suggest another opportunity for mutual pursuit. Keep them looped in on your plans for success, and chances are, they’ll join you.”
Have regular conversations with your suppliers
Open and regular dialogue with your suppliers is a surefire method to strengthen relationships. Together you’ll sort out any problems, build rapport, and create opportunities for collaboration. Try to stay in sync with your supplier, whether it’s via a quick call, a text, or a regular meeting.
Roxanne understands the value of modern communication, but still favors old-fashioned conversation.
She feels having a talk is especially important with her suppliers in faraway countries, like South Korea. “In today's age,” Roxanne says, “A lot of us tend to do a lot of texting and emailing, but personally, I think actually speaking together is critical. If we can’t meet in person, we do video calls.”
Read how automated AP can improve communication and avoid errors.
Focus on the value a vendor brings
‘You get what you pay for’ may be a cliché, but that’s because it’s true. Sure, you might find a less expensive supplier, but can you count on them to guarantee quality and on-time delivery?
Determine what’s most important to your organization, then build relationships with suppliers to see how they can deliver on your needs. You might discover non-monetary perks, volume discounts, or efficiency benefits. A local supplier might cost more but prove more reliable and knowledgeable about customers in your immediate market.
“We focus on value, not cost,” Pettipas says. “When you go for the lowest cost, it's a race to the bottom. It's disappointing and labor-intensive when you have to recall or redo something. Value is critical.”
Discover some of the digital tools that can improve vendor management and invoice processing.
Enjoy vendor efficiencies with technology upgrades
“Digital platforms have really changed the way we do business, Roxanne says. “Since we moved everything to the cloud, everything is more transparent and accessible.”
Technology can support a more timely, transparent, and efficient interaction between you and your vendor, which, in turn, helps bolster mutual trust.
Automated AP is a significant part of this end benefit because it can help track the status of invoices and payments while simultaneously improving everyday vendor communications.
In closing
The upside to strengthening supplier relationships is tangible.
Trusted suppliers will prioritize your needs and offer top-notch support, so you can avoid letting your customers down, even when facing challenges like a delayed service or damaged shipment. Happy suppliers, satisfied customers, successful business outcomes — it’s the recipe for success and future growth.
You can watch the webinar recoding here: Strategies to strengthen vendor relationships and get the best terms
