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Three Step Guide to Profitable Supplier Relations

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How well do you know your suppliers and how often do you communicate beyond placing orders and ironing out product specifications and payment issues?  Taking the time to nurture your wholesaler, distributor, manufacturer, and supplier relationships can lead to greater profits and success on both sides of the relationship.  Here are three steps for reaching a profitable relationship with your suppliers.

  1. Communicate more:  You and your supplier probably have a lot more in common than you think and, of course, your bottom line is the same – to pull a profit and keep happy customers.  Aligning strategic goals and pooling resources can be profitable for both you and your supplier.  Combining efforts and supporting each other’s goals can help you both.  Working in sync can save time, cut costs, and boost profit margins.
  2. Create value:  Offering each other support services can create added value to your business relationships.  The incentives you may offer your customers can be just as valuable to your supplier relationships.  Support programs and other add-on services can add value and strengthen your business relationships further.
  3. Cut ties when applicable:  Not every business relationship can be salvaged or should be.  In, hopefully, rare circumstances, a customer or a supplier can create challenges that affect customer satisfaction or may cost more than the profit they offer.  There are times when a short-term loss can be made up with a long-term profit but this is not always the case.  When business relationships veer off in different directions, cut ties amicably to protect your reputation and resources.

There is more to a supplier relationship than just a simple give and take.  You can gain value, as well as boost profits, by strengthening supplier relationships.  Keeping goals aligned and providing value-added services can be beneficial to both you and your suppliers.  Contact Socius for more ways to gain value from supplier relationships and get more out of your supply chain.

By Socius, Microsoft Dynamics GP, AX, SL, and CRM Partner based out of Ohio

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