Outline what your supplier expects from you and what you expect from them (and that they’ve agreed upon). Then ask their representative to sign it and countersign the documents yourself. Don’t rely on your supplier to draft the agreement or an NDA.
4. Hold suppliers accountable.
Did your supplier tell you that your widgets would be ready on Monday? If so, they should be ready on Monday. Not Tuesday or next Friday. In return for payment, your suppliers are obligated to accept responsibility for their promises and to be transparent with you when it comes to your business relationship with them.
Why is accountability so important? “Because accountability is what gets things done. Without it, things just don’t happen,” according to entrepreneur Danielle Zack.
And if a supplier cannot be trusted with the little things, it would be unwise to expect them to be trusted with much bigger things (i.e. increases in volume). Suppliers are an extended part of your team and the expectations you hold for your team should be similar to those for business partners.
5. Always have back-up suppliers on call.
Can you have a monogamous relationship with a supplier? In some (rare) instances I believe that you can. But this is the exception, not the rule. At times, suppliers may experience things that are outside of their control or simply get greedy.
This means that unless you have something in writing and options – your business is operating in a highly volatile situation. This could translate into price increases without notice, lagging lead times or even quality assurance issues. You may have an excellent relationship with your current supplier – if so, that’s great! Keep doing what you’re doing. But always have another supplier on call to pick up where the last one left off if need be.
Relying on one sole source is risky business. If a supplier is simply not delivering (in more ways than one) start to allocate a percentage of your purchases to a new supplier. Spread your risk and sleep a bit easier at night.
What other ways can entrepreneurs work successfully with suppliers? Let me know in the comments section below.
Photo Credit: GANT