There is a thin line between increased sales and reduced cash flow when offering credit to clients and so many vendors offer various credit terms to maintain a competitive advantage in the market. The credit offers are, however, scarce because not all companies can maintain sustainable cash flow while running offers at the same time. And that is why you need to take advantage of new crown Net 30 offers when they are up for grabs.
So while offering credits might seem like a big challenge to some of the suppliers, the buyer-supplier relationship is also marred with problems that first-time entrepreneurs ought to brace up for and know how to deal with them for future smooth business interactions, read on.
- Communication Breakdown- communication does not only revolve around the clients the supplier rather it is an all-inclusive process from within the organization to how all the staff members relate with suppliers and customers. The communication concept has many different aspects and for one, you need to establish a clear and timely channel of communication that will connect your clients and suppliers to the company.
Responses to queries are to be addressed in a timely fashion and whenever negotiations are carried out the goals of the company should be communicated so that the supplier can be able to fulfill his/her duties in line with the company’s strategic goals.
- Unity in the buyer-supplier chain- if you are running a business then you must know of the headache that comes with suppliers, and most of the time you will not be able to understand what caused their incompetence, to the extent of wanting to source for another supplier. What you need to know is that the problems cut across the board and no one supplier is perfect as they serve many organizations.
You will, therefore, find that at times the order is not delivered on time but with good reasons like the unavailability of a particular product. Such a scenario will surely weaken the existing relationship and that is why first the supplier needs to understand your company’s goals and second getting another supplier is not always the solution because of the time and money involved.
Alternatively, you need to ensure the relationship between you and the supplier is flawless and you can even try to get on their good graces by offering incentives instead of constantly changing suppliers.
- Transparency- transparent supply chains are known to reduce reputational risks while enhancing the companies standing as a trustworthy enterprise. Your company, therefore, needs to run a transparent procurement system which will ensure that all the members including the qualified and eligible suppliers can access the system elements, which include the evaluation criteria, legislation, technical specifications, and the procurement methods.
- Non-Biased contracts- the importance of contacts in business and supplier-buyer relationships is normally overlooked. So what people need to understand is that contracts are not just the stipulated terms and conditions as they document what you are buying and present a suitable framework on supplier performance and this it does by defining the customer relationship.
And just In case, you didn’t know, the oral agreements between the buyer and the supplier hold as much water as the written agreements only that it could be a bit tricky to prove the important facts in the agreement. Some of the common types of contracts that are normally created between suppliers and buyers are such as the Standard Purchase Order.
Companies should, therefore, ensure that the suppliers are not made to sign contracts that are not favorable for either parties as things might not end so well.
- Dealing with underperforming suppliers- mistakes happen during supply and you might find that goods left the warehouse in good condition only to arrive damaged. So it might not be al about underperforming but rather unexpected accidents, the above then call for less aggressive steps in a bid to maintain a healthy relationship.
Besides with the carefully instituted steps when it comes to dealing with damaged or flawed products the “underperforming clients” will be sure to step up.
- Sufficient supplier training- this particular subject again relates to the goals of the company and which your supplier should be made aware of, the reason being that once the supplier understands what the company wants its customers to experience he will be able to work towards attaining that goal.
On the other hand, supply chain training improves and streamlines the supply chain consequently leading to cost reduction when it comes to managing inventory, storage costs, and transportation.
The buyer-supplier relationship works in two ways, where the company needs to know the supplier and the supplier needs to fully understand their clients, leading to the business offering value to their customers. Besides having a good binding contract and flawless transactions, your company stands to benefit from dedicated service and special terms.