In February 2013 I wrote a blog post entitled ‘Know your suppliers’, the story discussed the importance of your suppliers to you in your customer offering; poor suppliers leads to a poor service, whether that’s as a result of the quality of materials they supply, the service they give you or the way you treat them. However, I also have the view that your suppliers need to get to know you.
At the start of the relationship they have something you need whether that’s raw materials for manufacture and conversion, tools and machinery, or a better service than you had elsewhere. Quite often this puts them, not you in a position of strength and it’s inevitably all too easy to succumb to their requests and arrange payment usually in full on the first order, long before you’ve had the chance to ‘test’ the service.
This is a situation we’ve been exposed to several times, but we’re big believers that this ‘period of testing’ can and should work to serve both parties, not just your supplier. Remember, you’re trying to establish their credibility and performance and their trying to test your integrity and trust, so you can use this period to further enhance your reputation. Accepting their first demand may seem easy and of course it is, but how will you ever play ‘hard ball’ from this point onwards? It’s far better to negotiate the rules for engagement, a process that builds relationships…if each then fulfils their commitment to each other i.e. 50% payment up front, 50% on date of delivery, you’ve started the basis of what can become a much stronger business partnership from equal positions.
It’s a point worth noting as we’ve personally experienced stories of suppliers who recall the names of the biggest brands to convince you to pay up front. “We work with the biggest of brands our customers include John Lewis Group, Mercedes, Rentokil, Initial, BP, Sky, Rocol, Draper, Investec, Heinz and many more.” But if you, like us, are not a big brand why would this make any difference to how you feel about them? In fact couldn’t this mean you end up losing out when their big brands come calling?
If you want to build a reputation for being fair and honest without having to compromise on your position I find this stance often works very well, even when dealing with the most bullish of Financial Directors.
If you would like to respond to the comments in this blog post or talk to us about how we could help you in your business, please get in touch.