⚡ Get All Content for 20% Off ⚡

The Art of Crafting Successful Vendor Relationships Partnering with established service providers allows a young company to scale more quickly and focus on developing and refining the core business.

By Zeke Adkins

entrepreneur daily

Opinions expressed by Entrepreneur contributors are their own.

When starting and growing a business, relying on third-party vendors to fulfill some aspects of your product or service to clients can be beneficial even necessary. Partnering with established service providers allows a young company to scale up in size more quickly and focus on developing and refining its core business.

Whether the organization focuses on software, manufacturing, travel, logistics or finance, most companies rely on outsourced solutions as part of their business model.

While this practice can streamline processes, lower overhead and allow a business owner to launch products in the marketplace faster; there are also risks to be considered. Specifically, a vendor's substandard performance can negatively affect a customers' experience with your brand. As a business owner, minimize these risks to ensure you are delivering on your promise to your customers.

For the past 10 years, my business partner and I have operated a business, Luggage Forward, that relies heavily on large multinational logistics companies. We learned very quickly that although our clients are our first priority, they are not always for our vendors. My company accounts for just a small fraction of the vendors' overall business and they have many other demands on their employees and processes.

Despite these hurdles, we have found ways to effectively manage these relationships. Consider these tips, based on my experience, to minimize risks associated with relying on third-party vendors:

Related: Why Vendors Can Make or Break Your Event

1. Anticipate and prepare.

When setting up a relationship with an established vendor, understand that the firm is likely to have a fairly rigid structure and may not be very flexible in its operations. If you are used to the pace of a startup, this can be frustrating at first. But a predictable process can work to your advantage.

As working with a vendor and figure out the steps in the company's process, you can then anticipate its methods and build your procedures around that. It's also likely that these processes will not change very often, if at all.

You can't control or change the vendor's processes so to get rid of headaches, make sure to create your methods to work around them.

Related: Vetting the Viability of Vendors

2. Sell the salesperson.

In most cases, you will have a sales representative or another main contact at the vendor's company. During the beginning of your new relationship, be sure to share how your business' potential, combined with this partnership opportunity, will benefit the vendor in the long run.

Vendors want to profit from this partnership as much as you do and a good pitching strategy may put you on more favorable terms with the vendor even if you have no history together. Having a good relationship with your main vendor contact is critical, particularly if an issue arises. It is much more likely to be resolved if you have someone internally at that company who wants to help you. Also, an unexpected thank-you for a job well done is a great way to build goodwill with your vendor, and it doesn't cost you a thing.

3. Be accountable.

If a vendor's mistake negatively affects a client's experience with your brand, you need to take responsibility. Do not throw your vendor under the proverbial bus. Even if it happens to be the vendor's fault, don't spoil an otherwise good relationship by speaking negatively about that company. Such bad-mouthing is unlikely to solve the client's problem that you're being paid to solve.

If reliance on a vendor is part of your business model, be accountable for your entire commitment to the client. If you have already anticipated this and put processes in place to minimize this risk of an error, this should only be a rare occurrence.

Outsourcing pieces of your business to third-party vendors can be tremendously beneficial if executed correctly. To minimize risks, remember to anticipate their process and adjust your methods to streamline working with them, get the sales rep to be in your corner, and take responsibility if a client is unhappy due to a vendor's actions (or inactions).

Related: Don't Pay a Consultant Before Chatting With Your Vendor

Zeke Adkins

Co-Founder of Luggage Forward

Zeke Adkins is the co-founder of Luggage Forward. Previously he was a member of the worldwide market-development team at Atlas Venture and vice president of Kurtzman Group, a consulting and advisory firm. He also served as executive director of Corporate Governance Summits, a joint venture between Kurtzman Group and Kalorama Partners.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Side Hustle

The Remote Side Hustle a 43-Year-Old Musician Works on for 1 Hour a Day Earns Nearly $3,000 a Month: 'All From the Comfort of Home'

Sam Ziegler wanted to supplement his income as a professional drummer — then his tech skills and desire to help people came together.

Business News

Costco CFO Reveals Uncertain Fate of $1.50 Hot Dog and Soda Combo

CFO Richard Galanti reveals that the price will stay the same — but only "for a while."

Business News

The Most Unexpectedly Popular Side Hustle of the Decade Has Low Startup Costs and High Markups

A new report shows that vending machines are a popular investment — and the industry is set to grow up to $3 billion by 2031.

Marketing

Ever Wonder Why Certain Websites Rank Higher Than Yours? This SEO Expert Reveals The Secret to Dominating Search Results

It's often the smart use of SEO, now supercharged with AI, particularly in keyword optimization.

Business News

AI Is Impacting Jobs. Here Are the Gigs Affected the Most, According to an Analysis of 5 Million Upwork Postings

The researcher said in the report that freelance jobs were analyzed first because that market will likely see AI's immediate impact.

Leadership

Former Interrogator Shares 5 Behaviors Liars Exhibit and How to Handle Them

Five deceptive behaviors to look for and how to respond to those behaviors when you encounter them.