One of the key decisions any company will make is selecting a new supplier. Good relationships with suppliers can lead to reliable services and increased sales volumes, whereas poor relationships may result in dissatisfied customers, missed opportunities, and even business failure. The last thing any business needs is an inability to bring in enough revenue to cover their expenses, so selecting the appropriate partnership, and forming a working partnership is vital. Here are a few do’s and don’ts when forming a partnership with your new supplier.
The Do's:
1. Ensure goals and culture are aligned
Choosing a supplier that has similar or identical goals to your own organisation means that working together helps both companies achieve their goals. For example, if a key goal for your brand is to operate sustainably, selecting a sustainable supplier will be crucial in achieving this goal.
2. Evaluate price versus quality
There is usually a correlation between price and quality – the more expensive something is, the better the quality, but not EVERY time. Alternatively, the higher the price, the more differentiated a product or service is. When selecting suppliers, consider what your customers expect from your products. Do you want to offer a highly differentiated, premium product, or do you want to give them the best price possible?
3. Use of technology
Choosing a technologically integrated supplier will allow you to grasp new opportunities swiftly, as well as adjust to changes in the macro environment. Rebate management software with built-in collaboration can make it easier for both parties to exchange information, giving you more time to concentrate on the risks and strategic opportunities that may arise from your deals in the future.
4. Assess how stable the supplier is
The significance of recognising and minimising potential risks in a supplier engagement is recognised by strategic sourcing and procurement. Always check the reliability of your suppliers and seek for those who have a lot of industry expertise. If possible, speak to leaders of organisations who have previously worked with the supplier.
5. Always communicate
Suppliers should regularly open dialogue with you in an attempt to improve results. Additionally, it should be expected that suppliers swiftly respond to your requests, and vice-versa. Lack of communication may result in disruptions and missed opportunities.
The Don'ts
1. Don’t overpay
Profitability is the most important aspect of business, so budgeting is a must-do. Reducing costs wherever possible increases profits. Overpaying on suppliers can put your business in jeopardy, especially during periods when sales are down. Evaluating suppliers price against quality is the main way of avoiding this.
2. Don’t overlook current performance
Creating a supplier agreement with an incompetent party is the last thing you should do. Pay close attention to how they perform, specifically keeping an eye out for low-quality and lateness delivering orders. You need to be certain that the provider you’re working with can deliver the caliber of service your business requires.
3. Don’t ignore supplier location
Location is a key consideration when selecting a supplier. You should concentrate on locating a supplier who is close by and shares your beliefs if you are a local company that built your brand on industry knowledge.
e-bate helps you maintain good relationships with your suppliers and maximise your margins:
e-bate provides a transparent platform where you can see exactly what is owed to you, so you don’t need to rely on your suppliers to tell you what’s coming.
Live data allows you to make better business decisions.
Presenting all your accurate rebate data in one place, you can manage the most complex of rebates across multiple vendors and products.
The e-bate Portal allows your Suppliers to upload their transaction data, documents and images directly, reducing the time taken to calculate rebates.
For more information, please get in touch today.
