Relationships with vendors or suppliers are a crucial yet frequently overlooked element of success for various industries, from retail to restaurants to medicine to auto repair. It’s safe to say that when giants of these industries boast their incomparable “experience” or “knowledge,” they are usually talking about the game-changing partnerships they have secured throughout their careers and their ability to secure new ones. They know that establishing trust and a reciprocal relationship with the companies they buy materials from is a mandatory requirement for growth, which rarely occurs without substantial external support. You have to get your vendors to genuinely want to help you, as opposed to wanting to win your business.
Arguably hardest parts are getting the vendor to work with you and communicating the benefits of prioritizing your business over their other clients. Here are a few ways to forge genuine relationships with vendors:
1. Take Them For A Test Drive
Many successful businesses began their partnerships with their closest vendors through a trial run. The industry standard might have been to develop contracts before doing business but they wanted to prove that money wasn’t their chief concern and show how confident they were in their skills. With no terms or fees to worry about, the potential vendors were less skeptical and therefore more willing to open up about their wants and needs. The downside is that it might be difficult to get your team motivated when they aren’t being paid accordingly and if they make one small mistake, all of their work will have been for naught.
But all the stress from the trial period might be worth having no stress at all when the time comes to figure out contractual terms because the vendor already knows you are reliable. And it’s a lot easier to grow a partnership when you don’t have to question whether or not you are being ripped off. Even companies that don’t use vendors have had positive experiences with trial runs. A marketing agency, for example, might want to begin a courtship by examining data to show the potential partner everything their current marketing team is doing wrong, completely free of charge. The potential partner sees the agency’s dedication while becoming more educated about what goes in to an effective marketing campaign.
2. Constant Communication
Every client likes to feel like they are your number one customer. The same concept applies to retail customers who return to the same store primarily because after their first purchase, they received an email that thanked them for their business and asked them to rate their sales experience. They feel like their business and insight actually matters. Big vendors are experts in your industry and know all about what kinds of strategies are most likely to produce a high ROI. How many months ahead of the busy season should you place your order? Are bulk discounts actually worth it? It’s a lot easier to trust a new partner when you get the impression that your opinion plays a role in their decisions.
Smaller businesses have the advantage of being able to offer regular communication and customer service. They can talk to their clients every week to update them on recent numbers and strategies for the future. Yes, this can be stressful because clients who aren’t so knowledgeable about what their partner does might misinterpret a report or overreact when their requests are not immediately met. But vendors who know their partner is listening to them and being truthful are ultimately much more likely to agree to new terms and follow through on their promises.
3. Remember They Are A Business Just Like You
The importance of paying your vendors on time doesn’t just stem from the need to maintain a solid track record. Without a steady stream of payments, your vendors cannot run their businesses. This is why vendors are often extremely appreciative of clients who can pay them well ahead of the scheduled due date. A great example is the relationship between a fast-casual restaurant and the farmers who raise and grow their all-natural ingredients. The restaurant must pay the farmer on time so the ingredients can be ready on time. All-natural ingredients are also expensive, and will only get cheaper if the farmers’ partners make deposits on a regular basis.
At United Capital Source, we are aware of the benefits of avoiding delinquent payments for business expenses. Many of our borrowers take out working capital loans, credit card processing loans, accounts receivable factoring, and other unsecured business loans primarily to pay their vendors or suppliers on time in exchange for lower fees, discounts, or extended credit. Seasonality can make it tough to maintain the same payment schedule but small business loans allow you to pay your vendors without damaging cash flow while your competitors struggle to fulfill their obligations.
Learning By Example
For a crash course in cultivating business relationships, look no further than United Capital Source. We aren’t the only business lender capable of approving small business loans at a rapid pace but we are among the select few that offer the service of living, breathing human beings who are ready to answer any question you might have or provide financial advice at a moment’s notice.
Much like the aforementioned trial run, we like to make your initial round of funding stress-free so you will return for a second round in the near future. Rather than giving you stringent, non-negotiable terms, we work around the circumstances of your business. So, if you’re wondering why we specialize in helping clients pay their vendors, it’s because we adhere to the same guidelines when developing terms for small business loans.