Building a good relationship with your suppliers is very essential for your business. If you established a trusted relationship with your suppliers, you can take advantage of special deals and even better terms of payments. These better terms can make a big difference for your business especially if your business undergoes rough times like a cash flow shortfall and you need payment extensions.
To develop a strong relationship with your suppliers, you must pay them efficiently. Avoid delayed payments, as much possible, and make sure that the person you assigned for the payment is following the payment policies strictly.
Ask discounts for early payment
One of the simple tips to get better deals from your supplier is by asking for discounts for prompt or early payments. Most suppliers offer discounts if their clients pay them early. Ask your suppliers if they offer this kind of deal or if not, negotiate the deal.
Negotiate credits in return for loyalty
Once you build a trust-based relationship with your supplier, you can now negotiate additional credits in return for your loyalty. If you have solid record of making prompt payments, negotiate for extra credits and tell your suppliers that they will also benefit from the deal since you will be more committed with the supplier and will not look for alternatives.
Review terms from current supplier and check if other suppliers offer better terms
If your supplier cannot provide you better terms despite your solid record as a good payer, then it might be the right time to look for other suppliers that can offer you better terms. If there are really suppliers that can offer you what you need, ask your current supplier first if they can match the term or improve their own terms before transferring to a new supplier.
It is crucial to identify the suppliers that have really vital function to your business such as your landlord and your IT suppliers. Vital suppliers that should be on the top list of priorities are usually those that you cannot find immediate alternative supplier once a problem occurs. If you cannot pay your landlord properly, you might get evicted from your storefront – that’s something you really want to avoid. IT suppliers should also be high-priority since you cannot change them easily. Changing them would be a high-risk decision for your business. Suppliers that are usually on the bottom list are those that offer commodities where a lot of alternative suppliers are available.
Always build stronger relationship with your high-priority suppliers and always aim to pay them promptly first so you can get better deals and avoid problems.
Avoid dispute, better to pay first before you argue
Although it may sound really bad, sometimes it’s better to just pay up your obligations first before you argue, if there are problems with the payment terms. If you see some discrepancies or inconsistencies from the supplies such incorrect or overcharges, pay the amount first then argue later. Keep a complete record and build your evidence to support your claim before you argue with your supplier to avoid creating problems in your relationship especially for a high-priority supplier.
Whatever business endeavors you choose, proper communication is always necessary in order to avoid crisis. Communicate with your suppliers, and give them idea about your business goals and needs. Aside from supporting your business, they might even have better ideas on how you can improve and grow your business since they might also be supplying to other businesses similar to yours.
Be it a small problem or a big problem, talk with your suppliers and let them know that you are experiencing a tight situation so they will understand and give you extension in case you might fail to pay on time, and avoid tainting your good paying record.