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3 Tips to Develop a Balanced Supplier-Vendor Relationship Remember how Mom taught you to 'always be nice'? The same thing applies to business.

By Maria Haggerty Edited by Dan Bova

Opinions expressed by Entrepreneur contributors are their own.


Like a seesaw, business partnerships work best when both sides remain conscientious about each other's needs. Seesaws are built to go up and down, but a continuously unstable equilibrium leaves both ends unhappy. Instead, a balance needs to be struck.

Related: Cultivating Relationships With Vendors Opens a World of Opportunity

As a business owner myself who has to manage many different professional relationships, I understand how quickly the balance among suppliers, vendors, carriers and retailers can deteriorate. What is often misleading is that "balance" sounds like a passive endeavor -- something to be enjoyed, but perhaps not worked for. Yet balance is never an ideal that just occurs.

Rather, it is earned. Like in any relationship, it is negotiated, and collaborated on. And, in my business every day, at Dotcom Distribution, I am reminded of just how powerful a positive balance can be. Like the two sides of that teeter-totter metaphor, suppliers and vendors have to rely on each other for survival -- financial and otherwise. Every interaction has to drive revenue and be a quintessential "win-win."

From my industry experience, I offer three tips for developing stronger vendor-supplier balance:

1. Look early for 'red flags.'

If a supplier or vendor is bad at negotiations from the start, chances are that working with either may be difficult in the future. I was at a wedding recently and the thought struck me that when wedding planning goes poorly between a bride and groom, those struggles will likely carry over into the marriage itself. Establishing good rapport, then, early on, and having foresight into potential future problems will save your business time and money. Not every relationship is -- or has to be -- the right one.

While minor tiffs can be opportunities to strengthen a relationship, be upfront with yourself when negotiations are not going well. When Dotcom first started working with a major shoe retailer, I remember standing in the warehouse with the retailer's COO. And what I saw was trailers of shoes arriving at an overwhelming pace, due to poor planning. A chaotic disagreement could have ensued.

And that would have signaled a tenuous relationship to come, but other interactions between us suggested that this was a partnership worth working on. As a result, we both jumped in and began that work right there in the warehouse.

Because we overcame the issue together, I now have a lifelong ally in that retailer and COO. However, had there been early red flags -- say, unrealistic expectations or assignment of blame for the logistical stresses I was seeing -- I would have been better off cutting ties with the company rather than wading through years of eggshell-type negotiations.

Related: The Art of Crafting Successful Vendor Relationships

2. Give to get.

Compromise can sometimes result in both parties walking away a little unhappy. Understanding that you won't always get everything you want will help you establish realistic expectations and prioritize the areas that are most important.

When you give a little, you situate yourself to get what you want later on. For example, we often offer companies our own management systems to increase their efficiency. Although this may seem like a burden, we gain greater visibility into those companies' front-end systems and labor distribution.

That visibility helps us cut distribution costs down the road. Similarly, if a client can work to better manage its inventory at a single touchpoint, our company can lower costs, like holding fees. As inventory improves, the client can funnel saved storage capital fees to pursue other sellable inventory. Over time, both sides win.

3. Think with humility and humanity.

At the end of the day, you have to remember that the supplier you work with is another business that wants to have its own successful bottom line. Negotiation is not personal, and all players are trying to maintain the best interests of those involved.

While there is always room for caution, never approach a new partnership as if you are going to be cheated. Instead, remember that a bit of humility and humanity can go a long way. Even when negotiations do not go as well as expected, remaining positive can preserve partnerships for long-term success.

In short: You will never win if you are constantly looking for someone to blame. Although profits are certainly important, business margins are not a pie chart, and reducing costs almost always requires being more efficient. So, work on finding ways to save a dollar without taking it out of your partner's pocket. The best solution is to remove that dollar from the equation completely.

The takeaway here: Be nice. Share. Be thoughtful and respectful. As an emerging business, your company is aiming for longevity, and longevity depends on the relationships you build and the industry reputation you develop. Being nice may seem simple, but this approach will serve you well no matter how big your business grows, or how many partners you add, in order to grow.

When it comes to finding balance with suppliers and vendors, never forget that seesaw. Why? Because whether you're working with another company for the first time or the hundredth, your partnership will need balance. With foresight, compromise and a humble approach, you can build stronger and more tactical relationships. From communication tools to inventory management systems and shipping carriers, the work you do to foster partnerships of true value will earn your business long-term success.

Related: When Choosing Vendors, Entrepreneurs Should Trust Their Parental Instincts

Maria Haggerty

Founder and CEO of Dotcom Distribution

Maria Haggerty is the driving force behind Dotcom Distribution’s third-party logistics team. Since co-founding Dotcom Distribution in 1999, she has played a critical role in developing and defining all aspects of the business, including sales and marketing, operations, finance and IT.

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