Most businesses treat their vendors like vending machines. Insert order, receive product, repeat. But the companies crushing it in their industries have figured out that vendors aren’t just order-takers. They’re goldmines of opportunity if you know how to dig.
Trust Forms the Foundation
Trust between companies is not some corporate buzzword thrown around in boardrooms. Real trust happens when a vendor calls you up and says, “Hey, that material you ordered? There’s a better option that just hit the market.” Or when you mess up an order specification and they catch it before production starts.
This kind of relationship doesn’t materialize after one handshake deal. You build it interaction by interaction. Pay your invoices when you say you will. Read their emails thoroughly. Consider their suggestions carefully. These acts have a compounding effect. Before long, a vendor will go the extra mile for you.Â
Communication Goes Both Ways
Vendors hate being contacted only when issues arise. Months of silence, then angry calls about a late shipment. That’s not a partnership. That’s a hostage situation. Smart companies flip the script. They pick up the phone when things are going well. “How’s business?” goes a long way. So does “What are you seeing in the market?” These casual conversations often reveal game-changing information. Maybe your packaging vendor just learned about new regulations coming down the pipeline. Perhaps your logistics partner discovered a cheaper shipping route. But they won’t share these gems if your only communication style is barking orders.
Shared Success Creates Lasting Bonds
Vendors are not just profit-driven, nor are they charities. They want stability. Growth. Recognition. The companies that get this create situations where everybody wins. Take pricing negotiations. Old-school thinking says squeeze every penny out of vendors. But what if you helped them cut costs instead? Share your demand forecasts so they can plan production better. Streamline your ordering process to reduce their administrative burden. The people at ISG recommend implementing technology that makes supplier contract management smoother for everyone. When vendors save money through these changes, split the difference. Now you’re both invested in finding efficiencies.
Recognition matters too. That vendor who saved your bacon during the holiday rush? Tell people about it. Write them a recommendation. Link them to other departments. A longer contract allows for equipment investment. They’ll soon act as if your success is theirs. Visit ISG for more.
Flexibility Beats Rigidity
Business is messy. Anyone who tells you otherwise is selling something. Markets tank. Factories flood. Ships get stuck in canals. The vendor relationships that survive aren’t the ones with the thickest contracts. They’re the ones where both sides roll with the punches.
Real flexibility looks different from what you’d expect. Sometimes it means accepting 80% of an order when your vendor’s equipment breaks down, instead of canceling everything and finding someone new. Other times it’s paying an invoice early because your vendor’s biggest customer just went bankrupt. Maybe it’s placing a larger order this month because your vendor needs to hit a sales target to keep their credit line.
It’s strategy, not charity. That vendor you helped during tough times? They’ll remember. They’ll complete nearly impossible rush orders. In a supply crisis, who gets served first? Being flexible brings rewards later.
Conclusion
Strong vendor relationships aren’t built through procurement software or negotiation tactics. They come from a simpler, but tougher, approach: treating vendors as partners. Forget the corporate speak and management theories. Focus on basic human principles. Be honest. Communicate openly. Help them succeed. Adapt as life throws you curveballs. Do these consistently, and you’ll gain a competitive edge. The funny part? Your competitors will wonder how you’re getting such incredible service and support from “just vendors.” Let them keep wondering.
