The Advantages of Strong Vendor Relationship in Retailing

Strong vendor relationships are important to any retail businesses, but especially to smaller companies. One advantage big-box retailers and other large corporate chains have is bargaining power, which lets them negotiate better prices with vendors. While small businesses can't get the price benefits of a big box retailer, they can still build strong relationships with vendors to give them a leg up on the competition.

Building a good vendor relationship means being consistent with your orders, doing a good job of selling the vendor's product, and being on time with your payments. When you establish the kind of relationship a vendor can depend on, he is more likely to give you a discount on his products. In this respect, vendors and retailers aren't just buyer and seller -- they are partners in delivering value to the end customer. Good vendors realize that to keep your business, they need to offer you a fair price so you can do the same with your customers.

Despite the efforts of vendors and retailers to build a well-planned, systematic supply chain with predictable ordering and delivery schedules, things change. Increased customer demand at the store level means you need vendors who can adjust quickly to get additional products out the door to you. If your relationship is strong, it is easier for you to make a call and get a vendor to act quickly.

Part of serving the end customer's needs is delivering a quality product that exceeds expectations. Sometimes, products have flaws or defects that need to be corrected or replaced altogether. In other cases, customers want more bells and whistles. While vendors normally have to make the adjustments, it is retailers who tend to hear the most feedback from customers. With a strong vendor relationship, you should be able to take customer wants and needs to your suppliers and encourage them to respond quickly to changing customer demands.

Strong vendor relationships help your business offer more customized products. Book retailers, for example, may not have certain books in stock. But they can help customers search vendor directories, process an order and receive it within a short period of time. By syncing computers with a vendor, you both can share customer and inventory data to best meet the needs of everyone. It used to take four to six weeks to receive special orders from retailers. Now, many offer fulfillment in a matter of days.