Are you making the most of your suppliers? Are you developing your business using their help? I would guess that most retailers do not utilise the power that our suppliers have for radically improving our businesses.
The success of every business is built on a three-sided platform: on one side are your customers, on the other your staff and on the third side your suppliers. Whilst we will often work hard to seek the attention and loyalty of the first two, the supplier’s part of the platform is very often taken for granted.
In doing this we’re really missing a major source of help in our businesses. If we focused on explaining our needs and what we want our suppliers to do for us, we could gain an advantage for our businesses in three key ways. These are: quality of supply, continuity of supply and the responsiveness of the supplier.
The benefits of treating your suppliers as business partners may also bring other benefits to your business. By developing closer relationships with them you’ll find them able to keep you well informed on new trends and technologies.
Suppliers will have useful information on what they’re sourcing long before the information becomes common knowledge. As a retailer, you’ll always be on the lookout for new and exciting products. You’re looking for products that are different and will provide your store with something better or more clever, to tempt your customer into buying. Your suppliers are scouts. They’re on the same quest as you are: looking for new and innovative products to bring to the retailer.
If you have an idea for a new product why not share it with one of your trusted suppliers? They’ll have the contacts and relationships with manufacturers all over the world. With their expertise and nous, they may be able to come up with real winning products for you.
When times are tough and businesses are looking for ways to differentiate themselves and to stay ahead of the competition, great supplier relationships can be an effective source of competitive advantage. In the past it’s made sense to rationalise the number of suppliers with whom we deal. It may well be that in changing times it is now worth reconsidering this tactic.
One business that’s made a strategy based upon excellent supplier relationships is Notonthehighstreet.com. This business has grown to a £15m sales turnover by actively recruiting small suppliers. It has around 2,000 different suppliers. They call their suppliers partners, and their business is built upon the great relationships that they’ve developed with them.
I’m not advocating that you should increase your number of suppliers to anything like this extent. It does demonstrate, though, that if you look at your suppliers as your business partners there are routes available to you to effectively improve and potentially grow your business. So, share your business objectives and strategy with your suppliers. Be open with them and it could be to your mutual advantage.