Opinion
kbb Birmingham 2018 Show Special
How to… get the most out of your suppliers
Malcolm Scott, commercial director at Swift Electrical, highlights the importance of building strong relationships with your suppliers and explains how getting it right can help retailers grow their business
B
oth suppliers and retailers come in all shapes and sizes, so any approach needs to be tailor-made, but the key points outlined below can be used in almost all situations. The first point is obvious: if you support your suppliers, they will support you. This is common sense, but I’m surprised how often it is overlooked. For example, if a supplier launches a new product, or a promotional sales drive, you need to support it in the short term if you want to build a long-term relationship. It’s also worth remembering that the supplier sales rep who tells you about such initiatives probably had no input in them: he or she has simply been told ‘here is our next project, now get out there and make it work for us’. If you appear to be helping him or her hit objectives, then he or she will be more inclined to help you when you need assistance.
Second, stop moaning about things that are unlikely to change, save your bullets for things that matter. If you’re always complaining about the success of online competitors, people will stop listening! Be part of the solution rather than part of the problem. For example, if your supplier sends you something that is slightly damaged in transit and it will be expensive or inconvenient to replace, try to broker a deal between your supplier and your customer, such as a damage discount.
Support
Suppliers are always looking for ideas to increase their sales, so be creative and even a little cheeky, but be reasonable. Come up with a proposition that allows the supplier to support you without losing business elsewhere – suppliers are interested in incremental business, rather than just switching existing business from one retailer to another. If a suggestion genuinely enables a supplier to grab
sure you forecast your needs well in advance – factory production runs are often based on sales forecasts. If you give your supplier an accurate forecast, the supplier will make the product and you will have a much better chance of getting it just when you need it.
Stop moaning about things that are unlikely to change, save your bullets for things that matter. If you’re always complaining, people will stop listening
business from its competitor, being daring and cheeky just might work. But if you’re going to ask for support from the supplier, make sure you’ve done your homework and have a clear idea of who you’re selling to, with clear quantitative targets – the more precise your plans, the more likely it is that the supplier will agree. Also, remember that suppliers need to make something on the deal, so be realistic and try to avoid suggesting simple price discounts.
On the supply side, there are some simple
things that you can do to secure better continuity of supply, such as always giving your suppliers as much notice as possible of your requirements. If you have asked a supplier to hold stock for you and the job is put back, make sure you keep the supplier informed: if you don’t, your order might simply get cancelled to free up stock for other customers. If you’re doing contract work, make
72 kbbreview kbb Birmingham Special Edition March 2018 Payment terms
On the credit control side, always pay your suppliers by their due dates. If you pay your bills promptly, you will get better deals and will be given a higher credit limit when you need it. If you don’t see paying suppliers as a priority and are often late, even if you have the money, the supplier will simply assume you’re short of cash, no matter how big you are or how well you’re doing. Somewhere a credit controller will be tracking your payment record and, believe me, these things are very black and white. Comments and statistics will stay on your file for years and will influence the amount of support suppliers give your business. If you make a real effort to focus on doing business with a smaller number of suppliers, you will be more significant to them and you will find buying a simpler process. Keep your supply chain simple: this will also encourage suppliers to offer you better support, such as including your details in the ‘find a retailer’ section of their websites. It will also make your staff training easier and allow you to get to know how your suppliers handle aftersales issues. Always try to attend your suppliers’ product launches and training sessions and make sure you visit all of your suppliers’ stands at industry events such as kbb Birmingham, as often senior staff from your suppliers will be there and will remember who they meet. Finally, our business is a people business: if you treat your suppliers like they’re special, they will return the compliment and your business will run more smoothly.
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