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The Partner in Vendor-Partner

Originally published
Originally published: 2/1/2018

Early in my career, I had a friend who worked in purchasing for a manufacturing company. He described the adversarial process he and his team followed for dealing with vendors. They’d get three or more vendors to bid on the “opportunity,” meet with each vendor, beat up the vendor verbally about price and quality, negotiate really hard, squeeze them for every last penny and then take the lowest bidder.

They followed this process every year and changed vendors regularly. There was no loyalty; it was all about price and delivery.

I know some people still follow this adversarial model of vendor relationships, but I think it’s a mistake. In our company, we intentionally call our vendors, “Vendor-Partners,” because it describes a significant difference in the relationship.

We think of our vendors as business partners — companies and people who can help us grow. The phrase also implies a reciprocal responsibility to them — we want them to be successful, too.

Your vendor-partner should be much more than an entity that supplies you with products. Think of your vendor-partner as a consultant who has your best interests at heart. The vendor-partner should be a source of useful information, help you solve problems, help you find the best prices, help you with buying programs and help you maximize any rebates available to you.

To get to this level of mutual benefit, you must operate in an atmosphere of honesty and transparency. Share your goals, problems and aspirations with your vendor-partner.

Make your meetings with your vendor-partner productive. You used to be happy when a vendor showed up with doughnuts for the team and a few jokes. Times have changed. Raise the bar!

Your vendor-partners need to bring you more. Set your vendor-partners’ expectation appropriately for a professional meeting. They need to make an appointment to see you (no more unexpected drop-ins and drop-offs) and they need to bring value. They could provide:

Ideas and products to improve your business. What do they offer that will substantially improve your business?

Market information. Vendor-partners have access to good information about the market. How’s it going? Are industry shipments up? If so (or not) why? What do they see that you don’t?

Customers and new business. Your vendor-partners know people who need your products and services. Do your vendor-partner employees live near you? Do they need HVAC services? Could your vendor-partner help with marketing to get more business for you?

Training. Your vendor-partners should offer you and your team training. Not JUST product training on their products, but also training on how to SELL their products, and how to market their products.

Information about competitors. Vendor-partners have competitive information that you don’t. They should be able to give you information about your competitors and the competitive landscape.

Employee leads. You need good employees. Can your vendor-partner help you find good employees? Do they have contacts you don’t? Ask them for referrals and contacts.

Other vendors & products. Your vendor-partner may know about other products and services you could use or should be offering.

A vendor-partner relationship is a two way street; you need to give just as you get. One good way to start is just to ask your vendor-partner what you can do for them. Here are some other ways to be a good partner to your vendor:

Pay what’s owed on time. This is kind of a basic rule, but many people don’t think about this. Not paying on time raises the costs for your vendor-partner as well as placing you in the category of a customer who is on shaky ground. If you want to be treated well, if you want the best pricing, if you want great service, pay on time!

Don’t beat them up on price, but insist on fairness — they need to make a profit too! Do you ever get the feeling that some people would be happiest if they could get a price from their vendor-partner that was lower than the vendor-partner’s cost? What a greedy, self-centered attitude. Your vendor-partner deserves to make a profit. If he/she doesn’t make a profit they’ll go out of business and won’t be able to serve you in the future.

How can they earn more of your business? Just like you, your vendor-partner wants to grow. Is there a larger opportunity with you? What would they need to do to earn more of that opportunity?

Treat the vendor-partner with respect. Be nice. Don’t be a jerk.

Help them increase their business. Look for opportunities for your vendor-partners. Give them referrals and sales leads. Be willing to provide testimonials. Offer to take calls from prospective customers. Help them grow!

Send complimentary emails and recommendations. If someone in your vendor-partner’s organization has done a good job for you, be sure to send a quick thank you email, and copy his/her boss. Positive reinforcement is a powerful thing!

Be honest about their issues (but in a constructive way). We all have problems in our businesses. Sometimes we don’t know what problems we have. Don’t ignore the problems you see in your vendor-partner’s business.

Strive for continuous improvement with your vendor-partners. Many small improvements compounded over time will yield massive positive results for you and for your vendor-partners.

Last year I read, “Driving Honda: Inside the World’s Most Innovative Car Company,” by Jeffrey Rothfeder. One of the interesting take-a-ways for me was the incredible level of support and interaction Honda has with its vendor-partners.

They don’t have an adversarial relationship, they want their vendor-partners to succeed, and they will exert amazing efforts to help their vendor-partners. It pays off in so many big ways for Honda, and that same type of vendor-partner relationship will pay off for you, too.


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