Can I Really Partner with a Vendor? Edit

How many times have you asked this question: “Can I really partner with a vendor?”

It’s a valid question when you consider that most organizations want to get the very best product and support at the lowest price. Your vendors, on the other hand, want to acquire you as a customer at the very highest profit level possible.

These are opposing goals.

Your best vendor option will want to provide the best possible products with the best customer service at at the best price because when you succeed, so do they.

However, many organizations take that good intention for granted; they don’t want to invest the time to analyze their relationships with their vendors. However, regular vendor reviews are essential, even for those vendors with whom you have a long-standing relationship. And analysis is important even when you believe you are already getting the best possible deal.

Trust is the first step but not the only one

It’s good to trust your vendors. A true partnership relies on complete transparency and honesty. A working partnership means two entities are cooperating to reap benefits greater than either one could do by itself.

However, without a little scrutiny every once in a while, a vendor agreement ends up costing more than it should. The slow increase in costs may not be for any malicious reason; but just like you, vendors will always work to find ways to maximize profits. It’s important to examine these relationships often enough to be sure that you’re still getting the best deal you can.

Dig deeper into true costs

The problem with performing regular reviews yourself is that you don’t have insight into the true costs of your vendor. Only industry inside experts will really have a clear picture of what a service costs to deliver — versus what the service provider charges.

For most of my 18-year sales career with a service provider, I was told that the cost of goods was marked up by a simple percentage to cover overhead costs. It sounded reasonable at the time. However, when I transitioned to the role of dealer, I discovered that the actual cost of goods was considerably lower than I had previously been told.

In addition, there were quota-based rebates and bonuses that could make the true cost of the products for the provider even lower. I quickly realized that it is possible to sell products at a significantly lower price and still be profitable.

Doing your own analysis is tough and time-consuming, but in the absence of true transparency, it’s necessary if you are to be 100% certain your vendors are in complete alignment with your company’s goals.

A competent Expense Category Expert (ECE) is an expert with direct, inside experience in a particular vendor industry. The ECE has intimate knowledge of inside operations and can provide the cost analysis that ensures you don’t overpay for a vendor’s proposed solution or products. An ECE will also have the skill and experience to “repackage” your vendor account to make it attractive to vendors who are willing to meet the challenge of providing the best quality products with the best customer service at the best price.

Are you looking for a better partnership with your vendors? If so, it’s OK to look closely at your current vendor relationships.