Finding a strong and mutually beneficial long-term relationships with trusted suppliers is a critical step in improving performance across the supply chain, generating greater cost efficiencies and enabling your business to grow and develop.
Most businesses are becoming increasingly focused on end-user satisfaction but it is just as important to ensure suppliers are not being overlooked in the process. Suppliers play a major role in your business and have the ability to influence your success and profitability as they affect your bottom line. It is critical to use trusted suppliers, ensuring that a mutually beneficial relationship is established.
Reliable customers are not only a dependable source of income for your business but can also become important to the suppliers’ business too. It has always been best practice to establish a strong relationship with key suppliers. However now, more than ever, it is essential to foster this relationship as businesses and suppliers can have a large impact, both positively and negatively on each other’s bottom line.
Business and supplier relationships are built on mutual trust, loyalty and common value.
To build better supplier relationships, a business needs to invest in its valued suppliers. The more each party understands the other’s business needs, the more they can help each other create further efficiencies and increased operational value.
In the current situation where external factors are having a negative impact on both businesses and suppliers, a strong working relationship with a supplier is beneficial to both parties. They might prioritise you, work hard to meet your quote, deliver goods in a timely manner and provide the support you require. In return you can provide a reliable client base for the supplier, which is important for the health of their business.
Using a Buy Now Pay Later B2B solution such as UnLock can benefit suppliers and buyers as it caters for both supply chain funding and invoice finance. All three parties should be working together to get the best terms and pricing for all involved.
Paying on Time
The ultimate goal of establishing firm relationships with key suppliers is to receive the best value for your dollar. Timely payments to suppliers are crucial in fostering productive relationships as it proves your reliability and shows that you are a beneficial customer to work with.
If paying suppliers on time is a concern, businesses have options of taking out a loan, which can include an overdraft or look into other options such as business-to-business buy now pay later solutions such as UnLock.
UnLock is an Australian Buy Now Pay Later B2B solution that enables small and medium sized businesses to improve their working capital and achieve financial flexibility as required in the current operating environment.
UnLock extends supplier terms from 30, 60 to 90 days, by paying supplier’s invoices upfront in return for a fee, which frees up a businesses’ cash flow. It also avoids supplier payment delays that may mean suppliers need to rely more heavily on credit lines, which could harm your relationship.
Businesses can use UnLock funds, starting from $50,000 and an UnLock facility complements and works in conjunction with any existing banking facilities.
Advantages of maintaining a strong supplier relationship
A fully engaged supplier is a competitive advantage for your business and can help you deliver new products or services that capture market share from your competitors, streamline your processes and drive sustainable growth performance.
When it comes to researching, seeking out and negotiating fresh deals with new suppliers, there are a number of initial costs involved, including finance, but good supplier relationships and finance facilities can reduce many of those costs. By establishing a mutually valuable relationship with key suppliers, a business can achieve long-term cost savings, as generally this will lead to reduced issues with availability, quality and delays in supply.
You might also be able to take advantage of attractive deals, incentives, and discounts offered by those suppliers who value you as a customer, which will give you an edge over your competition.
As the relationship with a business’ supplier develops, the communication improves. Suppliers will have a better understanding of their customer’s market, business and its processes, enabling them to increase the efficiency of their service as well as to potentially innovate and improve business practices.
This more in-depth understanding allows for a greater integration of business, technology and financial processes, with the aim to reduce the number of issues and improve efficiency. If issues do arise, the strong relationship between the business and supplier will make any problems simpler to solve.
Consolidated Supply Chain
Ultimately, if a business can reduce the number of suppliers needed and then the buying and budgeting processes will be simplified and there can be potential savings.
For businesses, consolidation allows for reductions in supplier numbers, creating a more streamlined and efficient supply chain. This can reduce internal workloads, whilst providing increased opportunity to reduce costs through economies of scale and leveraged spend.