Business & Finance Small Business

Why We Should Manage Vendor Relationships

How about some attention for vendors and partners? Quite rightly there's a lot of air time given to CRM and better ways to interact with customers.
But we can also improve our bottom line, and reduce our stress levels with a little attention to vendors and partners.
They're all having as much of a tough time as we are.
Maybe if we make their lives a little easier, we can get some benefit in return - better prices, more attention to service, and even extend our own client base into their contacts? The two big unknowns in businesses are a) whether we're going to win the deal? and b)how much will be the cost of sale? These two factors can add up to as much as 30% of prices.
That's the overhead we put on our supply chain with competitive tendering, and we lose a lot of friends in the process.
And worse still, we take on a lot of cost ourselves trying to figure who's offering the best deal.
Adding our vendors costs to our purchasing costs we might find they total 40% of the deal.
Competitive tendering would have to drive prices down a lot to match that, and nobody would be happy - neither customer or supplier.
Better we work together to take out that cost, so we both get the best deal, then extend the relationship to find other ways of improving each others opportunities.
Sounds like a partnership - well it should because that's exactly what it is.
And that partnership needs to managed as a relationship.
We probably need a system like a CRM, but for working with vendors and service providers.
Anybody thinking this won't work in real life should talk to us.
Everything we do with our vendors and service providers is partnership based.
Once we've chosen a partner we do everything we can to minimize his/her costs and introduce them to other business.
We don't always get the compliment returned, but vendors who don't want to be partners aren't around very long.

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