You want value for money from your suppliers but it’s not always about getting the cheapest price. After all, your business and brand reputation depend, to a degree, on your suppliers’ output. What matters is that your expectations and what is actually being delivered are aligned.
We’ve put together a 10-point checklist to help you review and enhance your supplier relationships:
1. DO YOUR SUPPLIERS UNDERSTAND YOU AND YOUR BUSINESS?
A full brief and clear communication are one thing but businesses have found that sharing business values and strategies has helped them get better results. Also, it should be easy for suppliers to get in touch with you if they have any queries or something needs to be clarified. The better the supplier understands what really matters to your business, the more likely it is that requirements will be met.
Of course, it’s a huge advantage when you have someone in the business who can communicate with your suppliers in their local languages. And a site visit will also help cement the relationship.
2. HOW TRANSPARENT AND OPEN ARE YOU WITH YOUR SUPPLIERS?
This is all about processes and procedures and, ultimately, trust. Your suppliers should always know where they stand with you.
3. DO YOU MEET YOUR SUPPLIERS’ EXPECTATIONS WHEN IT COMES TO PAYMENTS?
Suppliers frequently require up-front payments. At Currency Hedger we can ease the pressure on cash flows by providing trade finance, including invoice finance. We even pay your supplier directly. What’s more, as currency specialists offering highly competitive exchange rates, Currency Hedger can pay suppliers in their local currency, which often results in the suppliers offering discounts and the discounts negating the trade finance cost.
4. CAN YOU USE TRADE FINANCE TO NEGOTIATE DISCOUNTS BY BULK BUYING?
Find out whether your supplier would offer you discounts if you bought larger quantities at once. If so, consider trade finance to take advantage of those extra savings.
5. ARE YOU SURE YOU KNOW YOUR RIGHTS AND YOUR RIGHTS ARE PROTECTED?
When working with suppliers in different jurisdictions there could be risks involved that you aren’t even aware of, so get professional advice. If you’re having your own designs manufactured, don’t forget to consult lawyers or advisers well versed in the protection of intellectual property. Get advice about non-disclosure agreements, dispute resolution and local contract laws.
6. ARE THERE ANY POTENTIAL CONFLICTS ON THE HORIZON?
Conflicts are tricky to manage and they can damage a relationship, so it’s best to make an effort to avoid them. Anything that could cause tension in the future is probably better discussed from the start.
7. ARE THERE ANY INSIGHTS INTO YOUR CUSTOMERS’ BEHAVIOUR THAT YOU COULD SHARE?
Where you’re reacting to emerging customer trends or you’re working your customers’ preferences into your business strategy, you may be able to give some relevant, non-confidential information to your suppliers to help them help you serve your customers better.
8. CAN YOU ENCOURAGE INNOVATION?
Your products, services or processes could potentially be improved by your suppliers. Listen to them when they have new ideas. And think about how you can encourage innovation.
9. CAN YOU BE FLEXIBLE?
If a supplier has difficulties, sometimes it’s good to be understanding and give them a chance to get it right. This will strengthen the relationship and you never know, you may require them to be flexible in the future.
10. ARE YOU AN EASY-TO-DEAL-WITH CLIENT?
Remember that suppliers can choose to offer material and often significant benefits to the customers who are good to work with. What constitutes a good customer can vary. It may be a business that’s easy to work with or the value of deals. Becoming one of these customers is not only advantageous for transactions and negotiations, attaining customer of choice status implies a richer relationship that may well bring further opportunities.
If you would like to discuss any of the subjects mentioned above with us in more detail, get in touch with our team today.