What is a Good Vendor and How to Decide which one to Work with in the First Place.
Vetting vendors can be a difficult process, especially if you are evaluating a new supplier with not much prior history in the channel. It’s true that you can always move if a partnership does not work out. However, it’s important to consider how much a switch from one vendor to a new one is going to set your organization back. Therefore, strategic channel partnerships are critical to the future success of your business. Ultimately, you want to work with a good vendor whose values align with your organizational needs and is willing to establish a partnership that is mutually beneficial.
Aexhibits many characteristics that contribute to the success of both parties involved. So, if you are in the search to establish, maintain, and grow a channel partnership, here are 7 characteristics of good vendors you should take into consideration:
Although not a deal breaker, it is important to check their reputation with their existing partners, if any. Also, it is recommended that you do your due diligence in the areas of pricing, quality, delivery, and service. Each of these components has a number of critical factors that demonstrate the experience and success of a vendor:
You can discover a vendor’s reputation by researching reviews, feedback, references or testimonials, and company credit checks.
2. Open and Direct Communication
Communication is a two-way street. If you desire an open line of communication with your vendor, then you need to share information. Therefore, good vendors communicate effectively with their partners for the benefit of both businesses. After all, a major sign of an effective relationship is open communication. Your vendor’s ability to communicate, listen, and build lasting relationships can make a difference to both companies’ future success or failure.
In today’s automated world of channel management, vendors have many tools for sharing information and communicating with their channel partners. So, through a Partner Portal, vendors are able to share educational documents, news on new products, deadlines for rebates or MDFs.
3. Good Vendors Seek to Understand your Business
Good vendors treat their channel partners more than just a number. They strive to ensure those channel partners know they are understood and appreciated. Hence, demonstrating commitment can go a long way toward building channel loyalty.
Another characteristic of good vendors is their knowledge contribution or resources that may help you better sell their product or services. Getting to know your business and your business model for profitability will help them understand your side of the partnership and will build a better relationship between the two companies.
It is important to note, that a vendor with a customer profile similar to your business will be better prepared to meet your objectives. Their assurance to work with you and prioritize your requirements is a fundamental characteristic of a good vendor.
4. Quality Assurance
Vendoris the process of ensuring that they consistently supply products or services that meet the customer’s needs. However, assuring the quality of a vendor’s products or services is a collaborative effort where key metrics are applied to evaluate and score vendor quality assurance. Commonly known metrics are percentages of:
- Products that meet regulatory compliance
- Delivered on-time
- Completed upon delivery
- New products that meet the time, volume and quality standards
Good vendors should provide you with its quality documents and procedures. Therefore, during your vendor selection process develop an audit and assessment program. You should always conduct an audit before the contract is signed to confirm that they do not have any significant compliance or quality system deficiencies that could affect your ability to reach business goals.
5. Production Capabilities and Capacities of a Good Vendor
During your evaluation process, you should thoroughly appraise the vendor’s production capabilities, capacities, as well as limitations. Your vendor’s capacity and capability are fundamental to theirs and inevitably your business growth. As the vendor continues to develop new partnerships they need both the capacity and capability to provide you with products and/or services successfully.
Here capability refers to the vendor’s skills and experience to scale their business while, capacity is their ability to produce or sell enough to meet demand.
When it comes to capacity, consider the following:
- Do they have the capacity to handle your requirements?
- How do they manage fluctuations in demands?
6. Good Vendors are Accountable
Accountability means for the vendor to do what it takes to achieve mutually agreed upon goals between them and their channel partner. That means taking responsibility for decisions, actions, and results regardless of the outcome. Thus, a Vendor’s accountability ensures trust and improvement in its channel partnerships.
7. Business Ethics and Compliance
It is important to ensure that they comply with laws in their manufacturing country and their target market. Failing to ensure regulatory and ethics compliance can otherwise lead to legal consequences for you and your business.
In order to make informed decisions in selecting a vendor that fits with your existing culture and practices, examine the culture, ethics and compliance practices embraced by the vendor.
Other Factors to Consider when Searching for a Committed and a Good Vendor:
- Financial strength
- Language barriers
- Hours of Business
- Insurance and liability structure
- Returns or damage policy
- If out of the country, import and export requirements
- Able to supply within the timeframe required
- Preparedness for any emergency
- Problem Solving nature
- Balance Commitment and Competition
As a business owner, you are more likely dealing with more than one vendor whose goals differ from your organization’s objectives. Therefore, it’s crucial that you communicate your business concept to them before a partnership begins in order to discover if they are willing to help you grow your business.
Make sure you choose a partner that not only lets you run your business but enables you to grow your business. Therefore, a truly committed vendor acts as a source of information, helping their channel partners evaluate new products or identify business opportunities.