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Forging Alliances: A Lesson in Vendor Relationships

(November 2008) posted on Mon Nov 24, 2008

The 'best price' is often not worth the cost of a lost relationship.

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By Craig Miller

Just like in nature, symbiosis can be magic in business. To be worthwhile, the relationship must be judged by both parties to be mutually beneficial, a true win-win. A sure formula for a print provider to have short-term, no-win relationships with their vendors is to make it all about the two Ms: money and me.

The two Ms may blind print providers into reducing many of their supply vendors to a faceless group of order takers. Print providers may overestimate the true profit impact of media price and underestimate the bottom-line value of a vendor’s service. It is in this service relationship that a vendor becomes your ally.

My company has been in this business for 15 years. Strategic alliances at multiple levels of our industry have nurtured and reinforced our business. Forging these relationships may have been one of my most significant contributions to our company. In these dangerous economic times, I believe supportive relationships are more important than ever.

Once upon a time, our company hired a purchasing manager in an effort to "professionalize" our media buying. Our staff had long-term relationships with vendors and handled the buying ourselves. Like many purchasing professionals, our new guy subscribed to the "price is everything" philosophy. I think this is fine if your job is to buy paperclips, or paper cups, but not paper for our dye-sub. To help our new purchasing manager understand our company’s philosophy, I decided to provide him with the following object lesson.

"Yesterday I sold a $10,000 vinyl banner job. I asked you to buy the material, and I got your e-mail on the product you bought," I said. "Did you get me the best price on the vinyl?"

"Absolutely," he beamed.

"Do you remember I provided you with a list of vendors when you first started?"

"Yes, I have it."

"I told you that I considered these companies to be good and loyal partners, that we have a sense of loyalty to them. I noticed that you didn’t buy this from anyone on my list."

"The closest one of your preferred vendors was three percent more expensive for the same banner vinyl. I found a new guy with better prices," he reported proudly.

"How much do you think this will improve our profit?"

He looked at me perplexed, "Three percent."