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5 Rules to Maximize Supplier Relationship Management

Published on: Mon Apr 19 2021

Written by Tony Do

Amazon selling and sourcing is all about getting to know your supplier! Here are 5 different ways you can build strong, personal, and professional relationships with your product suppliers!

24 - Supplier Relationship Management

Selling on Amazon is all about relationship building, especially with suppliers. Read how to create, build, and maintain long-term relationships!

Whether you’re a wholesale seller or a private label seller on Amazon, your business relies on and revolves around building and maintaining strong relationships with your product suppliers and manufacturers. Regardless of your experience or success selling on Amazon, these relationships are necessary to sustain your business in the long run. Simply put, you can’t do it without them.

In this blog, we’ll be discussing how to manage relationships with your suppliers, with a heavy emphasis on maintaining, preserving, and cultivating strong, healthy, and transparent relationships with your business partners to empower your business for the long haul. Now let’s jump into it!

Rule 1: Value Your Supplier Relationships

Amazon selling is all about relationships. Half of Amazon selling is building relationships with your customers, and the other half of Amazon selling is building relationships with your suppliers. Your supplier wants one thing: consistent and respectful sellers who can purchase their goods. Sellers also want one thing: products they can resell for a profit. If both sides work together and are harmonious, each party will reap the benefits of their labor. However, this symbiotic relationship only works when both sides understand the value of the other and both work towards the common goal.

A valuable tip we provide to all Amazon sellers: building relationships is a marathon, not a sprint. If you treat your supplier relationships like quick transactions, you will miss out on plenty of opportunities and make the relationship more strained and less efficient. By changing your perspective towards relationship building for long-term goals, your business will become more efficient over time and you’ll be able to manage your relationships much more easily!

Rule 2: Humanizing Manufacturers and Suppliers

For sellers, the second tip we can provide sellers is to be considerate of the person on the other side of the deal. Most supplier-client relationships are more harmful and negative than you think. The sad reality is, many sellers forget that their suppliers and manufacturers are other human beings. Whether you’re communicating through the phone or email, your suppliers are people who are trying to help you and your business.

Whenever you communicate with your manufacturer, keep this in mind. Be polite, professional, and kind. Treat your supplier like you would a co-worker or a friend. As we mentioned above, both sides have the same goal and you both can only reap the rewards if you work together. Treating your manufacturer like a machine will lead to poor and negative relationships that can tarnish your reputation and suppliers canceling contracts. By engaging and positively interacting with your business partner, you cultivate and transform your business relationship into a personal relationship. In the end, both sides will be more than happy to work together. Not to mention, more polite and considerate clients will stick out to suppliers, and these positive relationships will translate to more benefits down the road.

Rule 3: Creating Trust and Mutual Respect with Amazon Suppliers

Mutual trust and respect are essential to maintaining long-term relationships with your suppliers. While they can be developed in multiple ways, we want to focus on three key tactics:

1. Expectations

There is a lot at play when it comes to meeting expectations and standards. Suppliers want sellers who meet their expectations. Expectations can be meeting sales quotas, while some may be as simple as acting professionally. Sellers who can satisfy their suppliers and meet their standards will always be prioritized over sellers who don’t. If your suppliers suggest something, consider it and do your best to meet those standards (unless their requests are outlandish or impossible). Do not make expectations that you do not follow through on. This includes making false promises or going back on your word or contract. Failing to meet expectations leads to more distrust and can negatively impact your relationships.

2. Urgency

Urgency comes in various aspects of professionalism. If you put in an order, suppliers want their sellers to pay for their goods in a timely and punctual manner. If you want to order products, do not wait until the last minute to notify your manufacturer. If you slack off or have no sense of urgency, you become a liability to their business. Lack of urgency reflects poorly on your reputation and business and can also damage the supplier’s efficiency and create financial problems. Simply put, be professional. Have high urgency on all business decisions, especially those that can impact other stakeholders like your supplier,

3. Communication

Communication is clear enough. Be transparent and communicate with your supplier consistently. Your suppliers are your business partners. If you need something or if you are falling behind schedule, tell your supplier as soon as possible. Do not keep your supplier in the dark. Whatever happens, make sure they know so it does not impact their business.

Rule #4: Building Long-term Relationships with Product Suppliers

Like we always say, building and sustaining relationships is a marathon, not a sprint. If you think of relationships as a short-term objective, you’ll sacrifice long-term sustainability for short-term benefits.

One example of prioritizing short-term benefits over long-term benefits is price negotiation. Suppliers usually have set minimum order quantities (MOQs) or strict price points for the cost of goods. These costs may be FINAL and suppliers rarely budge on their price points. A few sellers will not accept that price and will try to haggle to a lower price, even though the price is final. Suppliers and manufacturers may see this negotiation as disrespectful or will argue that the seller is asking for too much. We’re not saying you should never negotiate, always negotiate when possible. But, you must take into consideration the policies and standards expected by your supplier. Remember that your suppliers are people too, and you do not want to alienate them or jeopardize your relationship for short-term benefits like saving a couple of bucks during negotiation.

You may come across a lot of these tense situations with your supplier. Remind yourself that you want to preserve your relationship with your supplier and prioritize longevity over short-term benefits. Do what is best for your business and your relationship.

Rule #5: Want the Best Wholesale Supply? Become Their Favorite Seller!

Favoritism is prevalent in most aspects of our lives. Whether it be in school with your teachers or buying food at a restaurant, favoritism exists. Amazon sourcing and your relationship with manufacturers are no different. All suppliers will have favoritism towards some sellers over others. Favorite sellers could be the best selling ones or even the sellers who are the kindest towards the supplier. Nonetheless, these favorite sellers always get the best supply. We discussed this in detail in our article on Landing Wholesale Contracts, but generally, you want to become your suppliers’ favorite seller. Sellers who have high value to their supplier will gain additional perks such as access to exclusive items/products, better discounts on buying inventory, and more attention and care from the supplier.

While your goal should not be to be kind to your supplier just to get these benefits, it’s important to note that suppliers have favorites. If you can establish strong relationships with them, they might provide you with some of these perks. But, don’t go into relationships expecting or prioritizing these benefits, Genuinely try to build authentic relationships, and maybe the perks will come after,

Prioritize Building Your Relationships

Many sellers will overlook their relationships with their suppliers because they see that relationship as transactional, a one-time purchase that is not going to lead to anything. But the best-sellers are the ones that understand and truly value their relationships with everyone, not just the suppliers. If you want to become a top seller, you have to take the time and resources to manage your relationships with all stakeholders including your supplier. Treat your suppliers like you would a co-worker because, in the end, you all are working for the same goal. By being collaborative and cohesive, both parties become more efficient and more profitable in the long run.

For more tips and tricks on supplier relationship management or how to find a manufacturer, check out our blogs and FBA tools to help you get started!

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