If your goal is to get the best price and not the best product or service, you will strain the relationship. Your vendor will offer fewer services and most likely a lesser quality product or Service. Put yourself in the vendor shoes, would you like your customers to demand better prices that are below your cost? You probably will try to get the business however, quality and service are compromise and eventually the customer experience is affected.

Try to understand the parameters of the relationship with the vendor. Restrictive or exclusive relationships just don’t work. For example, limitations with other vendors or with future customers. In addition, contracts that have severe penalties for seemingly small incidents should be avoided. If the vendor asks for an extremely long term contract, you should ask for a shorter term with a renewal option.

On the other hand, as you expect the vendor to satisfy your needs, you should be open to the vendor’s requests also. If an issue is small and insignificant to you but the vendor insists on adding it to the contract you may choose to bend in this situation. This shows good faith on your part and your willingness to work towards a contract that is mutually beneficial to both parties.

Once the relationship with the vendor has begun, don’t assume that everything will go according to plan and executed exactly as specified in the contract. The vendor’s performance must be monitored constantly in the beginning. This should include the requirements that are most critical to your business. For example: shipping times, quality of service performed, order completion, call answer time, etc. Monitor performance. Are certain practices costing you money?

The key to a successful vendor Relationship Communication! Be proactive; Don’t assume that the vendor knows your business. A well established and well maintained line of communication will avoid misunderstandings and proactively address issues before they become problems. Be clear. Don’t try to mask your intentions that will lead to mistrust.

If the vendor does not live to expectations or does not comply with the agreement, it is time to make the change. Don’t put all your eggs in one basket, keep your eye open. Always strive to get the best vendor for your products or services.