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Business basics
6 min

5 Ways To Build Solid Relationships With Your Vendors

Build stronger vendor relationships with simple habits that earn better terms, priority, and reliability.

Published at | Updated:
A small business owner shaking hands with his flower vendor.

Key takeaways

  • Treat vendors as partners by sharing your plans and building mutual trust.

  • Pay on time, and schedule payments in advance so you never miss a due date.

  • Sign clear contracts to set expectations and protect the relationship if problems arise.

  • Show appreciation through public support and simple thank-yous to keep vendors invested.

Why are relationships with vendors so important for small businesses?

Vendor relationships are the ongoing working ties between your business and the suppliers you rely on. They matter because SMBs feel disruptions and delays harder, with less cash on hand than larger companies. A good vendor relationship helps in normal times. It matters even more in a crisis, like a global pandemic, an economic downturn, or supply chain issues.

Strong vendor relationships can give you access to the best supplies or products. You may even get them before your competitors can. A good connection can also mean your vendor prioritizes your orders. That helps with scheduling and when supplies run short.

When a vendor knows they can rely on you long term, they may offer discounts or better payment terms. That helps you maintain a healthy cash flow. If you do hit an unavoidable crunch, a vendor you already trust is more likely to accommodate you.

How to build and improve vendor relationships

You can improve vendor relationships with small, consistent habits, not big budgets. It comes down to communicating well, paying on time, and treating suppliers as partners.

Here are five ways to boost your relations with vendors and suppliers without revolutionizing the way you do business.

1. Get to know them

This may sound trite, but your vendors are people too. They have hobbies, passions, and interests beyond work. Getting to know your vendors more deeply helps you build a real connection. That connection benefits both of you, on a personal and professional level.

As a first step, invite them on a tour of your business. This works well if they’re local or visiting your area. It’s a great chance for them to meet the team they’ll work with. It also helps them become personally invested in your success. If you can, try to reciprocate with a visit to their facilities when the opportunity arises.

It can also help to socialize outside of work, for example, by having them over for dinner. Building a deeper personal connection, when possible, can lead to stronger and more committed business ties.

2. Treat them as partners

Share as much information as you can about your business plans and goals with your vendors. Being more involved creates a sense of commitment and builds mutual trust between you and your vendors. This inside knowledge also helps your vendors offer you relevant products and services. Those offers can align with your strategies.

Worried about trade secrets or a confidential marketing strategy leaking? Ask your vendors if they’ll sign a non-disclosure agreement (NDA). This protects your proprietary information while you take the relationship to the next level.

By the way, this tip goes both ways. Treat the relationship as a partnership, not a simple series of transactions. Ask your vendors about their own plans and goals to see how you can help. Maybe you can recommend them for new business opportunities and contracts. You could also create a joint scheme that promotes both your plans.

3. Honor their payment terms

As a business owner, you know how much trouble late payments from customers can cause. So try not to put your vendor through that. Honor the payment terms they set and make timely payments.

If you struggle to track due dates, an online accounts payable (AP) tool like Melio can help. It lets you schedule every payment in advance, so vendors are paid on time, not a day late.

If you can afford to pay sooner than the due date, your vendors will appreciate you even more. They may even offer you early bird discounts, making this a win-win for both of you.

4. Sign contracts

We know. This whole time we’ve told you to be friendly with your vendors. Drawing up a contract may feel like the opposite of friendly. But contracts can actually save your relationship, should trouble arise.

A signed contract puts everything on the table. It sets each side’s obligations and rewards. It also spells out what happens when things go wrong, so there’s no guesswork mid-crisis. Contracts can also prevent issues, since each party is clear about what they’re getting and giving.

In other words, a contract creates more clarity. That means less frustration when friction occurs, and better relationships.

5. Show appreciation and support

Like all relationships in life, your relationships with vendors should be caring and supportive. If your vendors know you truly care about them and their business, they will appreciate yours even more.

Support your vendors publicly without spending a cent by:

  • Sharing their social media posts.

  • Referring your friends and colleagues as potential customers.

  • Participating in your vendors’ online or in-person events whenever you can.

  • Posting a positive review online.

You can show your appreciation in private by just saying thank you every once in a while. A phone call, a text message, or a holiday card can go a long way too. Each one lets your vendors know how valued they are.

Treasure your vendor relationships

At some point, your business’s success may depend on the strength of your vendor relationships. Following the tips above can help fortify them by creating trust and embracing shared goals.

To maintain good vendor relations, you’ll need an easy, reliable way to pay your business bills. Sign up for Melio to start sending payments online today.

Vendor relationships FAQs

What does vendor relationships mean?

Vendor relationships are the ongoing working ties between your business and the suppliers who provide your goods or services. Strong ones are built on trust, clear communication, and reliable payment.

What are the four types of supplier relationships?

They are commonly grouped as transactional, collaborative, strategic alliance, and partnership. Each reflects how closely you work together and how much you share plans and goals.

Is managing vendor relationships a skill?

Yes. It draws on communication, negotiation, and follow-through, and it improves with practice as you learn what each vendor values.

*This blog post is intended for informational purposes only and is not intended as financial advice.
**Melio does not provide legal, tax or accounting advice, and you should consult with a professional advisor before making any financial decisions.

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