If there is an external force that provides a product or service to your business, then you have suppliers. If you want to be able to manage your suppliers in the best and most fruitful way possible, you have to, first of all, resolve to treat them with the same respect that you give your actual employees! Second, you have to be prepared to take all of the advice you’re given, as managing suppliers is a task that can become surprisingly difficult, especially for those that have never done it before. Fortunately, such advice can be found below.
How to Manage Your Suppliers
Clearly define who is tasked with what
If you want to receive the products or services that your suppliers provide for you both on time and in good condition, then you have to forge a relationship with them. A massive factor in creating such a partnership is making sure your wires never become crossed. The best way to do that is to, right off the bat, clearly define who is tasked with what. When you do this, neither you nor your supplier can accuse the other of acting unprofessionally going forward, something that always has the potential to lead to the souring of the relationship somewhere down the line.
Importantly, you should make sure your supplier knows what is expected of them in regards to the transportation of the goods that they are providing you. As stated in the FCA Guide by Trade Finance Global, the term Free Carrier, which falls under the FCA Incoterms umbrella, is used to describe an agreement in which a seller, shipper or supplier is made responsible for the packaging and loading of the goods that they are transporting, as well as the export clearance of the goods at the port or terminal. You should be making sure, before you enter into any business with your suppliers, that they know about this agreement and that they know what is lawfully required of them.
Maintain a relationship with them
As stated, building a relationship with your suppliers is key if you want your working partnership with them to be as fruitful as possible. Maintaining a relationship as you progress through your partnership, however, is of even more importance. Doing this is the only way you can be sure that you are continuously receiving a good standard of service and products.
To maintain your supplier relationship, you should ensure that you take the time to meet them face-to-face on occasion. By doing this, you will: one, show them that you are interested in the specific work that they do, and two, show them that you want the relationship between you both to be as open as possible. Something else that you should do is never become lazy when it comes to the orders that you place. Regardless of whether you've been working with a supplier for 10 months or 10 years, you should always strive to make their job easier by ensuring that you place orders on time or in good time.
If you want to reap the rewards of a fruitful working relationship with your business’s suppliers, then you need to resolve to manage them well at all times.
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Bottom line: Managing suppliers well comes down to clear communication, consistent performance tracking, and building relationships that go beyond price negotiations. The businesses that get the most value from their suppliers treat them as partners, not just vendors, and set expectations early so problems get caught before they become costly.
Frequently asked questions
How often should I review supplier performance?
Most businesses benefit from a quarterly review, though high-volume or high-risk suppliers may need monthly check-ins. Set a few clear metrics like on-time delivery, quality consistency, and responsiveness, then track them over time rather than reacting to single incidents.
What's the best way to handle a supplier who keeps missing deadlines?
Start with a direct conversation to understand the root cause, since it might be a capacity issue, a communication gap, or something on your end. If the problem continues after that discussion, put expectations in writing with specific timelines and consequences before considering a switch.
Should I always negotiate for the lowest price?
No. Chasing the lowest price often leads to quality issues, missed deadlines, or a supplier that cuts corners to stay profitable. Focus on total value instead, including reliability, communication, and flexibility, since those factors usually matter more than a small price difference.
How many suppliers should I work with for the same product or service?
Having at least two suppliers for critical items reduces risk if one experiences delays, price hikes, or quality problems. For smaller or less critical needs, one strong relationship is often more efficient than managing multiple vendors.
