Changing suppliers: When it’s time to cut the ties
Friday, November 13, 2020
After some time in business, you’ve likely developed strong relationships with a certain set of suppliers. You know what they can do for you and when, you know their policies and procedures, and you’re comfortable that your goals and values are congruent.
All well and good, but unless you periodically analyze the status of your relationships, it’s too easy to fall into complacency and make assumptions that are no longer valid. Then you risk misplaced loyalty.
So, here are signs that it is time to critically assess your loyalty to long-standing suppliers, perhaps cut those ties, and look afield for new suppliers:
1. The person you’ve worked with for a long time is no longer employed there. You could count on that person to intuitively provide you with the best products, the best service, and the best price. In fact, that person may have been the face of the company to you. But the liaisons you’ve been handed off to do not share that same commitment.
I used to work exclusively with one travel supplier for a particular destination. I just loved working with one individual there as I could depend on her insights and advice to improve on my own ideas for a spectacular outcome. Once she retired, the remaining staff were more keen on pushing a product in which I had no interest. I changed suppliers.
2. A change in processes. Perhaps what was once an easy procedure has become burdensome, illogical, or costly, all for the purpose of making it easier for the supplier, not you the customer. And you realize that the rewards of doing business with them aren’t large enough to justify the increasing inconveniences.
3.Sometimes a decrease in quality is so insidious that you don’t even recognize it until you examine with a critical eye. A particular home goods company built its reputation on high quality, durable machines that people could actually pass on to their children. But increased reports of short-lived machines erased its reputation, especially after people learned the new parent company outsourced the manufacturing and substituted plastic parts for metal—all to save money, thinking that no one would notice the deteriorating quality.
4. Then there are the broken promises. Granted, no company is perfect, but when you notice increasing frequency of broken promises, it’s time to change. Promises can be anything from delivery times, to quantities, to prices, and refunds. Particularly now I’m seeing insurance companies and travel companies reneging on promises of refunds. Broken promises speak to the heart of a trusting relationship, and if you can’t trust your supplier, then it’s definitely time to seek out another.
5. Perhaps your supplier has changed its partners and those new partners are not in sync with your values or goals. Why try to meld your company into their new partner’s value system when you can seek out another supplier that fits you best?
6. Has your trusted supplier reduced its choices? Where you formerly had eight choices of lightbulbs, for example, now you have two choices. Any time your supplier dwindles its choices for you, they’re trying to squeeze you into a more economical model for themselves. And your primary responsibility is not to worry about someone else’s bottom line.
7. Has your supplier eliminated or drastically reduced what made them so valuable in the first place? I used to patronize a particular coffeeshop for a dependably excellent cup of coffee.
One morning, I realized the coffee was very weak, barely more than plain water. Figuring it was a one-off experience, I asked for a properly prepared coffee, but I was handed a similarly flavorless coffee. I was told that they had to cut back on the amount of coffee used. A coffeeshop, specializing in coffee, decided to scrimp on its main product!? I changed coffeeshops.
8. What about removing rewards or incentives to do business with them? Let’s say your supplier used to throw in free shipping above one hundred dollars purchased; now you have to spend five hundred dollars to get a “free” pack of gum. Does that go unnoticed?
A friend used to do half a million dollars business yearly with one supplier and was rewarded with a pleasant bonus in recognition of her value to their revenues. The pleasant bonus was first cut in half and then eliminated entirely. Feeling that her loyalty was not acknowledged or appreciated, she changed suppliers. And to confirm her assessment, that original supplier never even contacted her to ask why she had stopped doing business with them. Clearly her loyalty was one-sided.
9. Maybe it’s you who has changed, not the supplier. Your market niche, your product or service line, or your clientele has changed which demand that you seek a new supplier more in line with your new direction.
Like a long-standing relationship that has gone bad or outlived its usefulness, know when it’s time to say goodbye and move on.
- Business Management, Services & Risk Management
- Association Management
- Distribution & Warehousing
- Food & Beverage
- Healthcare Administration
- Travel, Hospitality & Event Management
- 8 exercises for strengthening your business writing
- How employers are helping employees reduce student loan debt
- Report: Only 6% of US companies offer comprehensive child care benefits
- 3 ways to make your supply chain more resilient
- Millions of high school students set for success: Celebrating Career and Technical Education Month
- Tips for interrupting unconscious bias
- 10 negative employee behaviors that undermine success
- Study: Researchers search for better ways to nix inventory errors
- A strategic quotient for the board
- CES 2021: The year of staying home with gadgets
- The top 10 biggest data breaches of 2020
- Types of disability insurance businesses need to know about
- Seattle, Salt Lake City, Boston top list of best cities for construction
See your work in future editions
Your content, Your Expertise,
Your Industry Needs YOUR Expert Voice & We've got the platform you needFind Out How