Suppliers enable your business. Whether your business is a major multinational or a one person operation, it relies on suppliers. These suppliers provide tangible goods such as the stock that you put on the shelf as a retailer, the food you embellish as a restaurateur, etc, or intangible services such as marketing expertise, web page design, legal services, etc.
Your business relies on their input as if they are part of your team. Developing a good working relationship with them can be a key component of your sustainable competitive advantage, especially in the current business environment where there are many supply issues.
It is unwise to take the position of driving your suppliers into offering a very low price that jeopardises their profitability. This approach leads to them looking for more lucrative customers which means that when they find them, they will prioritise them over supplying you which will threaten your supply.
Negotiating with suppliers should be done in a collaborative manner, not as an adversary. Developing a professional relationship based on mutual benefit from your transactions promotes good will with them that will mean that your suppliers prefer dealing with you as opposed to others with whom they do not have such a good working relationship. A good working relationship with your suppliers is very important when the occasional ‘tough times’ happen.
With on-line purchasing, it is difficult to develop a personal relationship. In these instances, it may be that the best you can do is ensure that you meet all terms and conditions promptly with no ‘black marks’ on your record. Depending on the supplier, your demonstrated commercial record may move you to being a ‘preferred customer’ which will put you further ahead of your competitors that do not have the preferred status.
Seek to work with your suppliers to market differentiated offerings by collaborating with them to tailor solutions to your target market, leveraging the unique value-add that can only be sourced from your business. For example, you may offer building components that you value add with tailored design and installation expertise based on your long track record of satisfied customers that others cannot match.
You may be able to add value to suppliers by combining complimentary products from separate suppliers into a bundle, enhanced by your service. For example if you are a retailer, you could offer flowers from one supplier, chocolates from another, and beverages from another. By collaborating with the respective suppliers, you can offer ‘bundles’ at attractive prices for a special event such as Valentine’s Day, Mother’s Day etc. that will increase sales of each of the products that would not be as attractive as the individual offerings. Think laterally and discuss the options with your suppliers to come up with offerings that are unique to your business. The opportunities are limitless.
Embracing your suppliers as key members of your team enables enhanced, differentiated offerings that your business will most likely not be able to offer, builds goodwill that will set your business apart from your competitors, and lays the basis of a business relationship that will pay dividends in good and tough market circumstances.
