Supplier Relationship Management: 10 Ways to Build Strong Bonds with Vendors


Building and maintaining great supplier relationships is a must if you want to stay competitive in retail. Having healthy relationships with these vendors helps ensure that your shelves are healthily stocked with great products that bring delight to your customers.

In this post, we’ll be exploring how you can create and cultivate strong relationships with your suppliers. From finding the right vendors to crafting mutually-beneficial agreements with them, the pointers below should give you some ideas that you can apply in your supplier management processes.

Let’s get started.

What is supplier relationship management?

Supplier relationship management is the practice of planning, evaluating, and managing your interactions and connections with third-party vendors. In retail, this typically involves dealing with your manufacturers, wholesalers, fulfillment partners, and other contractors. The objective of supplier relationship management is to maximize the value that you’re getting out the relationship.

Now that you have a quick definition of supplier relationship management, let’s talk about how to find vendors and manage your relationships with them.

On finding the right suppliers

Building great relationships starts with finding the right people to connect with. Fortunately, in the realm of retail suppliers, there are plenty of sources that you can look into.

Check out tried and tested supplier sources

Some of the most common ways to find suppliers include:

Industry events – Expos, buying shows, and other industry events offer numerous opportunities to learn about upcoming trends in your industry. More important, they enable you to get essential face time with potential suppliers and their merchandise, so you can see and touch products firsthand.

Trade publications – Peruse industry magazines to get information on what products are selling and who’s selling them. Also pay attention to the ads in these publications, as it’s common for suppliers to advertise their products and services in these magazines.

Industry associations – Most trade associations provide networking and directory services to help you connect with vendors. And in some cases, you don’t even have to be a member of an organization to take advantage of certain benefits.

Online directories – Check out online vendor directories such as ThomasNet and Alibaba. These sites enable you to easily find suppliers with a few keystrokes.

Go beyond traditional sources

The above-mentioned sources aren’t the only places to find suppliers. With a bit of resourcefulness and by asking the right questions, you’ll also be able to zero in on great vendors. Some of the things you could check out are:

Supplier awards – Michael Patrick, founder and president of the training company MOHR Retail, says that retailers look for supplier awards and see if the winners (or nominees) might fit into their selection.

Competitors – Patrick adds that looking into competing suppliers could help you find your next vendor. Do your research, or ask your existing suppliers who their competitors are to see if there’s anyone you can use.

Use a combination of sources

For best results, don’t rely on just one resource when looking for suppliers. Be sure to utilize multiple sources so you can get a comprehensive view of what’s out there.

Take, for instance, Todd Heyboer of Todd consults multiple publications and events when searching for suppliers. “For his vertical (apparel ecommerce), he used:

In addition, he also checks out the websites of conferences and conventions to see who’s attending the events.

On crafting agreements

Once you’ve selected suppliers to do business with, it’s time to negotiate and talk about the terms of your agreement. Below are some techniques that you can apply when you’re at this stage:

Don’t over-rely on boilerplate contracts

Attorney Sarah Rathke, a partner at Squire Patton Boggs, and co-author of the book Legal Blacksmith: How to Avoid and Defend Supply Chain Disputes, says that retailers shouldn’t depend on boilerplate agreements.

“It is important for your agreements to be well tailored to each of your individual supply chain relationships,” she says. “Obviously, this requires more effort at the outset of each supplier relationship – and more dedication to the contract negotiation phase – but it almost always saves time and money in the long run, and increases satisfaction.”

Ask more than tell

“The single biggest pitfall for buyers in vendor negotiation is to talk too much and not ask enough open-ended questions,” says Patrick. According to him, retailers negotiating with suppliers should ask more questions that begin with “What,” “Who,” “How,” and “Why,” because they “open the conversation and encourage dialogue.”

“The can also reveal critical vendor information that can be used later,” he adds.

Put your plan on paper

Patrick furthers that retailers should come in with a plan and put it on paper. “Even experienced buyers can forget to cover certain topics in a crowded agenda,” he said.

“Writing down not only your negotiation objectives but why the vendor should agree, is one of the key differentiators between average and superior retail negotiators.”

On building and strengthening relationships

So you’ve found the perfect supplier and you were able to strike up a solid, mutually beneficial agreement. Now it’s time to talk about how you can strengthen your relationship and ensure smooth sailing ahead.

Talk to suppliers even when you don’t need to negotiate

Patrick advises that retailers touch base with vendors even when they’re not negotiating. “Check in frequently with existing vendors to ask about their current state of business, priorities, plans for upcoming markets, launches, etc. Because these conversations will often be more relaxed, vendors will be more likely to share information more freely.” he said.

Think of your suppliers as partners rather than just mere vendors

This may not apply to all your suppliers, but in some cases, it helps to consider vendors are partners that you work with rather than third parties who simply provide products and services.

Adopting a “partnership mindset” can help you optimize your relationships. 

Case in point:, a site that provides photo scanning services.

According to the company president and CEO Mitch Goldstone, ScanMyPhotos forms collaborative relationships with their vendors to ensure that both parties are using the most efficient processes when working together.

“We invite our vendors to think of us as a partner. The better we do, the better they do. The process is simple, just ask vendors to help improve your workflow.”

He cites an example involving the United States Postal Service (USPS). According to Mitch, they invited USPS to understand ScanMyPhotos’ shipping and fulfillment operations, so that the postal service can make recommendations. 

“Many, many elements we thought helped streamline the business, were all wrong and the USPS marketing team became our best partner to reinvent everything,” recalled Mitch. 

Invest in product forecasting and share forecasts with vendors

“One way that supply chain relationships often break down in the retail industry is that product forecasting is imperfect,” says Rathke. “Retailers sometimes do not know, or fail to adequately analyze, how much of a given product their consumers will likely demand over the coming buying phase. Suppliers then are left totally in the dark.”

It’s important that you invest in the necessary forecasting tools and processes so you and your suppliers are on the same page when it comes to the merchandise that you need.

Consider what Spreadshirt, a platform for personalized clothing and accessories, is doing. According global apparel manager to Kristina Michniak, they “continually update and share new forecasts [with suppliers] for accurate and real time monitoring of the global supply chain.”

Be honest, prompt, and thorough

It sounds simplistic, but honesty — coupled with promptness — can do wonders for your relationship with vendors. As Heyboer notes, if something goes wrong, retailers need to reach out as soon as possible and explain the situation.

As an example, he says that when the quality of the merchandise he gets is lower than expected, he reaches out to the concerned party as soon as possible and provides documentation (photos) to effectively communicate his message.

This allows both parties to resolve the issue and move forward quickly.

Use the right communication tools

Speaking of which, strive to use efficient communication tools with your suppliers. Keep all comms in one place — ideally a communications platform that has a search feature — so you can find and retrieve information quickly. Avoid using multiple channels (e.g., email, phone, SMS, instant message) when talking shop with your vendors. Instead, use a supplier management tool or a communications app like Slack to maximize efficiency. 

Be an excellent client

Again, this sounds obvious, but you’d be surprised at the number of businesses that neglect professional courtesies. Things like strictly adhering to payment terms and being polite and cordial when communicating go a long way in nurturing strong supplier relationships.

So what exactly does it take to be an excellent client? For starters, make it a point to pay on time. As Armando Roggio wrote in his article on Practical Ecommerce:

Wholesale distributors and many product manufacturers work on thin margins, so that cash flow is important to their business. A retailer, even a small one, that pays on time as promised every time becomes a trusted and respected customer. Some wholesalers track payment history right in their customer relationship management software and even rate retailers based on how well they pay.

Merchants with a good payment history may earn better prices or, eventually, get better terms, meaning that they will have longer to pay.

Submitting the necessary requirements and adhering to each supplier’s process can also help you maintain better relationships, notes Roggio. For example, if a vendor needs orders to be submitted using a specific form or spreadsheet, it wouldn’t hurt to comply with their requirements. Doing so will enable them to process your orders quickly and efficiently. Plus, it shows that you’re a team player.

Bottom line

Your suppliers will always play a big role in your retail operations, so don’t neglect them. Strive to find the best vendors in your industry, and once you’ve secured an agreement, maintain a healthy relationship through communication, professionalism, and good old fashioned niceness.

About Francesca Nicasio

Francesca Nicasio is Vend’s Retail Expert and Content Strategist. She writes about trends, tips, and other cool things that enable retailers to increase sales, serve customers better, and be more awesome overall. She’s also the author of Retail Survival of the Fittest, a free eBook to help retailers future-proof their stores. Connect with her on LinkedIn, Twitter, or Google+.


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