How Startups Can Build Strong Supplier Relationships

Supplier Relationships

Young startups have so many priorities that supplier relations can be easy to overlook. Having good relationships with vendors, however, is one of the best-kept secrets to rapid growth.

The world of supply chain management can be a scary one for new entrepreneurs. That’s why this guide offers 11 ways young businesses can develop great supplier relationships:

Start Local

Building a relationship with a national supplier is a daunting process. These giants in the industry look more for dollar signs than relationships. Turning to local suppliers allows you to establish a personal connection.

Do some research and identify vendors in your area who can sell you what you need. Build rapport by telling new contacts that you sought them out because you want to support local businesses. As your business grows, your friendly neighborhood supplier will support you and your growth in turn.

Screen Carefully

When selecting suppliers, do your due diligence. Look at past customer reviews, pricing, and shipment times when screening candidates. Determine what you value most and who offers the best service based on your checklist.

Explain your quality and service expectations to potential suppliers. By making your reliability criteria clear, not only will you start strong with your chosen supplier, you’ll have ruled out less dependable options.

Buy in Bulk

If you can, start off on the right foot by buying big from your supplier. If you begin by ordering dribs and drabs, your new contact may decide you’re not worth their while.

Of course, you shouldn’t go all in with a supplier you know nothing about. Doing your research in advance will lead you to the right supplier from which to buy in bulk.

If you can’t swing large orders yourself, consider group purchasing. Going in with other businesses allows you to make purchases large enough to earn discounts you couldn’t qualify for on your own.

Put It in Writing

Make a commitment early on by establishing a supplier relationship agreement. Signing an SRA at the outset will let your supplier know that you mean business and hope to develop a strong relationship.

Such agreements spell out everything each side can expect from the arrangement. It should include product and/or service descriptions, agreed-upon prices, timelines, and payment and delivery terms. You’ll also want to specify your preferred means of communicating with the supplier and them with you.

Start with a short agreement of only a couple of months. You don’t want to get stuck with a supplier if things go sour quickly. A short agreement can be re-evaluated soon if money gets tight, but it also provides a path to a long-term relationship.

Pay on Time

Nothing makes a supplier happier than timely payment. You become a reliable customer and one whom the supplier will look forward to doing business with.

If you receive shipments on a regular schedule, see whether you can set up autopay. This feature, when available, makes life a whole lot easier for both parties. Simply put shipments into your schedule and budget, and technology will take care of the rest.

Order in Advance

Let’s say autopay isn’t a possibility because your orders are not on a set schedule. The best way to accommodate your supplier is by placing orders well in advance. Pressuring the supplier into fulfilling an order you placed at the last minute is bad for the relationship and your business.

Preparing orders in advance requires careful planning on your part, but it also helps your operations run more smoothly. Perform regular materials audits and inventory checks, and notify your supplier of an order at least a week or two beforehand.

Personalize the Partnership

Put a face to the name of your startup. Mask up and meet your supplier in person to introduce yourself and iron out the details of your partnership together. This will personalize your connection and make it stronger right out the gate.

Stop in at your supplier’s office every now and then (if they’re back on premises), or schedule a call. The more you can touch base, the stronger the relationship you can cultivate.

Offer Discounts on Your Products or Services

Depending on your business, you could become your supplier’s supplier. Turn your supplier into a customer by giving them a discount on whatever it is you sell.

Are you a marketing agency? Offer your office furnishings provider 20% off an email campaign to existing or prospective customers. Own a gift shop? Give your packaging supplier a bulk deal on holiday gift baskets for all their clients. You can grow your customer base and strengthen the relationship with your supplier all at once.

Keep Them in the Loop

As your business grows and changes, keep your supplier informed. Alert them to adjustments you’ll be making to future orders so they can accommodate them without undue pressure. As you keep your supplier apprised of your business plans, they may even come up with cost- or time-saving suggestions.

Supply chain management systems can connect both parties so that your supplier can be notified of changes automatically. You can implement any number of technology solutions, or use trusty means like email, phone, or text to stay in touch.

Make Referrals

Are you happy with your current supplier? Refer them to other companies. Whether these are other startups or business contacts you’ve made through your entrepreneurial journey, your supplier will be grateful for the business.

By referring your supplier to others, you’re saying thank you for their exceptional service. This gesture is sure to strengthen your relationship. Who knows? They may send some referrals your direction as well.

Stay Committed

Many businesses branch out to different suppliers for different material needs. If you can manage the logistics, this could help lower your overall costs. To maintain strong relationships with your suppliers, however, stay committed to only a few.

When you play the field, you trade long-term benefits for short-term savings. You may cut initial costs by spreading your spend over several vendors, but strong relationships provide greater benefits that develop over time. A long-term supplier is more likely to respond quickly to an emergency order or give you extra time to pay an invoice should a cash crunch arise.

Strong supplier relationships will make your startup’s life that much easier. Explore your options and identify suppliers of choice early on. As your company grows, so will your professional bond.


Larry Alton Larry Alton is an independent business consultant specializing in social media trends, business, and entrepreneurship. Follow him on Twitter and LinkedIn.