By Roy Rasmussen
If your company sells a physical product, your business success is entirely dependent on your relationship with your suppliers. 100 percent of manufacturers agree that supplier disruptions represent one of the biggest risks to their business, according to the 2016 BDO Manufacturing RiskFactor Report. Supply shortages can potentially hurt your sales, cost you customers, damage your reputation and ultimately ruin your business. This makes maintaining a good relationship with suppliers a high priority for successful business owners. Here are four ways to build a better relationship with your suppliers.
Pay Your Suppliers on Time
Nothing can hurt your relationship with your suppliers faster than failing to pay your bills on time. Paying on time isn’t just the right thing to do, it’s in your own best interest as well. When you don’t pay your suppliers on time, they are less likely to prioritize your shipments when supplies get tight during peak demand seasons, such as the holidays, which hurts your business and cash flow. Paying on time keeps your suppliers happy with you and makes them more disposed to make your shipments a priority during crunch times.
If you do occasionally find yourself running short on cash flow and you’re not sure you’ll be able to pay your supplier on time, do them the courtesy of telling them promptly. This will give you an opportunity to make payment arrangements, and it will give them an opportunity to adjust their budget in case their own cash flow is running tight. Communicating promptly will better your relationship much more than announcing that you need to make a late payment at the last minute.
Build a Personal Relationship
A business relationship is strengthened by a good personal relationship. While it’s easy to focus on the bottom line in dealing with your suppliers, if you treat your suppliers like part of your team, they’ll be more inclined to reciprocate in their dealings with you.
Personalize your relationship with your supplier by setting up opportunities for face-to-face contact. Greet them when they drop off deliveries. Invite them to a tour of your workplace and drop by their office occasionally. Send them greetings for holidays and special events. Keep them updated on developments at your company and ask them how their business is going. Congratulate them on business achievements and invite them to celebrations at your company.
Establish Good Communication
Good communication is as key to business relationships as to personal relationships. Clear, accurate communication with your suppliers will help ensure correct, timely deliveries and avoid shipment errors and missed deadlines. In fact, communication is so important that Maker’s Row recommends looking for good communication habits as a primary criterion for screening suppliers.
When first establishing a relationship with a new supplier, take a note of who your contact person is. Set up a communications schedule for when you contact them. Include a schedule for follow-up reminders, which may be especially important with a new supplier you’re not used to communicating with. Schedule three follow-up reminders, spaced a couple days apart. If you don’t hear back after three attempts, it’s probably time to look for another supplier.
Establishing standard procedures for communicating with your suppliers will help ensure good communication. For instance, o-ring supplier Apple Rubber uses standard forms and product samples to make it easy for clients to communicate exactly what they want. The more clearly you communicate what you want and when you need it, the lower your risk of late shipments or ordering mistakes.
Give Your Suppliers Lots of Lead Time
Letting your suppliers know what you need well in advance is another foundation of good communication and a strong relationship. Your suppliers probably serve multiple clients, and if you need to change the contents, quantity or supply of your order, it may require them to adjust their shipments to other clients as well. Giving your suppliers advance notice is the best way to ensure that your shipment doesn’t get disrupted by what’s going on with your suppliers’ other clients.
There may also be times when your supplier asks to adjust your delivery in order to meet their obligations to other clients. Being flexible about these situations may lead your supplier to prioritize your shipment when you need accommodations.
Roy Rasmussen, co-author of “Publishing for Publicity,” is a freelance copywriter who helps small businesses get more customers and make more sales. His specialty is helping experts reach their target market with a focused sales message. His most recent projects include books on cloud computing, small business management, sales, and business coaching.