How to manage your supplier relationships

To successfully manage your supplier relationships, you need to treat them as long-term partners, not just transactions. The single most important action is to establish regular, open, and honest communication. This goes beyond simply placing orders; it’s about building a professional friendship that can lead to better prices, reliable stock, and crucial support when you need it most.

Why good supplier relationships are so valuable

Viewing your suppliers as partners in your success can bring significant benefits. A supplier who likes and respects you is more likely to go the extra mile when you have an urgent request or a problem with a delivery. As your business grows, a strong relationship provides the foundation for negotiating better terms, such as lower prices for larger orders or more flexible payment schedules. Furthermore, they can become a valuable source of information, giving you early warnings about potential price increases or a heads-up on new products before they hit the general market.

A step-by-step guide to managing your suppliers

1. Be a great customer: The simplest way to build a good relationship is to be a reliable and professional client. Always pay your invoices on time, provide clear and accurate orders, and be polite and reasonable in your communications. This builds a bank of goodwill that is invaluable when you need a favour.

2. Schedule regular check-ins: Don’t just get in touch when you need something or when there’s a problem. A quick, scheduled phone call once a month or every quarter keeps the relationship warm. Use this time to discuss what’s working well and to get a general update on their business.

3. Discuss performance constructively: Give balanced feedback. If their service is excellent, tell them you appreciate it. If there are recurring issues (e.g., late deliveries, damaged goods), raise them calmly and focus on finding a solution together. For example, you could say, “I’ve noticed the last few deliveries have been a day late, which is causing us some issues. Is there anything we can do from our end to help get things back on track?”

4. Negotiate as you grow: When your order volumes increase, you have a valid reason to ask for better terms. Frame it as a win-win situation. Approach your contact and say something like, “Our business is growing, and we expect to increase our orders with you by 50% over the next year. To help us achieve that, would it be possible to review our pricing?”

5. Stay informed: Ask about their business. Are they facing any challenges with raw materials that might impact your supply chain? Are they launching new products that could be a good fit for your customers? The more you understand their world, the better you can plan for yours.

Top Tip: While email is efficient for placing orders, picking up the phone to discuss important matters or just to check in can make a huge difference in building a stronger, more personal business relationship.