Your business can’t succeed without a healthy relationship with your suppliers, as they are the wellspring of your business. They provide your product, ingredients, and the means to deliver them. They make it possible for you to serve your customers and for your business to stay afloat.
Creating a lasting supplier relationship is a two-way street. It’s not just about you as a business owner looking to get what you need on time and at a fair price, but it’s also about the supplier looking to get what they need from your business as well.
This article will run you through how you can keep a lasting relationship with your suppliers.
The Importance of Building Strong Relationships with Suppliers
Other than maintaining your business operations, having a reliable supplier brings various benefits, such as:
- Being a preferred client brings discounts and reduced costs
- Your supplier is more likely to be forgiving and flexible when you need extended payment terms
- You can make larger purchase orders more often as a trusted buyer
- You have a supplier you can rely on to continue doing business with you in the future
- Improved delivery speeds give you an advantage against competitors
How to Maintain a Healthy Supplier Relationship
Here are the three things you can do to ensure that the relationship you build with your suppliers stays strong for a long time.
- Make Punctual Payments: Paying on time or even ahead of schedule for deliveries and services is a sign of appreciation for the supplier’s efforts. It also shows the supplier that you are a reliable, disciplined client who understands the value of time.
If your small business struggles with payments due to unpaid invoices, you can take advantage of receivable factoring. This lets you continue paying your suppliers while waiting for the invoices.
- Know Your Suppliers: Take an interest in your suppliers by getting to know them personally. Doing this can help you better understand the business environment and the factors that impact their operations.
- Respect Them as Part of Your Team: Keep the tone of your communications professional, and keep your suppliers updated on how your business is doing and how it is getting along with them.
- Establish Early and Frequent Communication: Suppliers are more willing to do business with you if there is solid and consistent communication between the two of you.
- Manage Your Expectations: Make sure that you have realistic expectations and ask the right questions to understand the requirements of your suppliers.
How Invoice Factoring Strengthens Supplier Relationships
Supply chain factoring or invoice factoring is an excellent way to strengthen your relationship with your supplier. This cash flow accelerant allows you to get a cash advance on your unpaid invoices.
You can convert your outstanding invoices into cash through a factoring company. The company will give you a percentage of the invoice upfront, which you can use for expenses such as payroll or paying your supplier for your inventory.
When your client pays, the factoring company will send you the remaining amount minus the company’s fee.
Invoice factoring alleviates the strain on your business from unpaid invoices and helps you retain the trust of your suppliers despite your monetary conditions.
No business can succeed without a healthy and long-lasting relationship with its suppliers. Invoice factoring is a strategy that helps you get the cash you need to pay your suppliers and strengthen your connection to improve the longevity of your business.
Are you looking for a factoring company in Alabama? Porter Capital offers various working capital solutions for a variety of business industries. Apply now!