The Importance of Building Relationships with Suppliers

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relationships suppliers

Success in the business world is defined by the relationships you forge. Today, we unpick why building relationships with suppliers is so important and how you can establish healthy, long-lasting ones.

While managing and nurturing customer relationships through effective marketing and excellent customer service can maximise your income, your relationships with suppliers are equally valuable. Organisations need suppliers to provide the resources for the products or services they sell or use to run their business.

Having a healthy relationship with your suppliers will mean you get better value for your franchise. The better you know each other, the more likely you are to reap benefits like preferential pricing and a dedicated service.

The advantages of building relationships with suppliers

Building relationships with suppliers provides you with a valuable information source, and you can both benefit from reductions in risk and costs.

1. Reduced costs

If you and your suppliers know each other well, you can refine your mutual processes to work effectively. Trusted relationships with suppliers often result in more preferential rates.

Building relationships with your suppliers also means you have better cost control. The expense of constantly looking for new suppliers in search of a more attractive deal will soon add up. There are also logistical costs of having a complex supply chain. Having a smaller group of suppliers you can rely on and form long-lasting relationships with reduces supply chain complexity and should cut costs.

2. Less risky

Having regular and repeat business with the same supplier will encourage stability and reduce risk.

3. More efficient

Having simpler supply chains will lessen the likelihood of error and waste. Strong supplier relationships encourage efficiency as organisations can adjust to work well together.

4. Can resolve problems easier

If you have clear communication with your suppliers and both parties are honest about any issues that arise, this should result in quicker problem resolution. Being open with each other and having an efficient method of communication means fewer issues with quality and availability.

5. Increased customer satisfaction

If you can deliver your products or services on time and without any defects, your customers should be happy doing business with you. Having a pool of highly satisfied customers will, in turn, result in stronger branding. If you always provide great products or services to your customers, you will become a brand they can rely on and trust. And so, there would be no reason for them to seek business elsewhere. You never know, they might even bring new customers to your franchise.

3 key foundations for building stronger relationships with suppliers


It goes without saying that having open, two-way communication is the key to an effective business relationship. If you don’t engage with your suppliers enough, you won’t be able to learn as much as you need to about them. Without this, you will fail to build the most mutually beneficial arrangement.


If you and your supplier can strike the perfect agreement straight away, that’s great. But the majority of the time, you will have to change the way you work in some way to adapt to the other organisation. The strongest relationships take time to build, and both parties need to be willing to listen to each other and welcome innovation and improvement with open arms.


Taking the opinions and needs of the suppliers into consideration is very important. Appreciating what each party brings to the relationship will maximise the interests of both.

Other foundations you need to consider are openness, fairness and trust.

How to achieve great relationships with suppliers

  • Set the tone. First impressions definitely count, so make sure your relationships with suppliers start off the right way.
  • Understand your suppliers. The best relationships will be formed when you understand your suppliers well. Become familiar with their business positions, their purpose and how they operate.
  • Establish channels that enable effective communication and talk regularly.
  • Make sure everyone in your business is in the know. While you might be doing all you can to maintain a fantastic relationship with your suppliers, unless other contacts in your company are, you’ll end up taking two steps back. Make sure to set a strong example and run training sessions to inform your team of the processes.
  • Pay them promptly, but if it isn’t possible, give them a heads up with enough time.
  • Try to avoid making rushed orders. They can put a lot of strain on your business and your relationships with suppliers.
  • Keep an eye on the financial position of your suppliers. Chat to other businesses operating in your industry and monitor your suppliers’ general financial stability.
  • Be open with how you feel. If anything starts to concern you about your relationship and the products/service, bring it up and work through it. For instance, flag any damaged goods to your supplier ASAP and provide the supporting documents.
  • Be aware of cultural differences. Working with international suppliers is commonplace in business; in order to build a great rapport and solidify your relationship, you need to research their culture.

Building relationships with suppliers – the summary

Having strong relationships with your suppliers will make your supply chain more efficient, productive and cost-effective. When you find a good and reliable supplier, you need to treat them like gold. Work just as hard on establishing a strong relationship with your supplier as you do with your customers.

Being on friendlier terms with your supplier will often mean conflict is easier to resolve. If you are pleasant to work with, there’s a higher chance of suppliers finding ways to improve operations and potentially even noticing your needs arise before you do. If your operations are optimised, the more productive your company will become and the more satisfied your customers will be.

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