How to Build Long-Term Relationships with Suppliers: Make the Most of Your Business Connections in 2023

how to build long term relationships with suppliers

Suppliers are fundamental to the operations of most businesses, providing the goods and services from which a final product is produced. Building a good long-term relationship with your suppliers can mean the difference between profit and loss, timeliness and missed deadlines, high and low quality. Clear communication, trust, and respect between you and your suppliers can translate directly into efficiency and cost savings both now and in the future.

Are Suppliers and Vendors the Same Thing?

Before we dive into strategies to build long-term relationships with suppliers, it’s worth looking at the terms “supplier” and “vendor” and what they both mean. These two words are often used interchangeably, but they’re generally understood to have slightly different meanings.

A supplier is typically a business that provides raw materials, frequently in bulk, to other businesses. In contrast, a vendor sells finished products to the end consumer, whether that consumer is another business (B2B) or an individual (B2C). They typically operate on opposite ends of the supply chain: a supplier sells to manufacturers, while a vendor purchases from manufacturers or distributors and sells to consumers. While a vendor will generally offer a variety of goods or services in relatively small quantities, suppliers typically provide a narrow range of products in large quantities.

Why is a Good Supplier Relationship So Valuable?

While it is of course important to have a good relationship with your vendors, the relationship you have with your suppliers can impact your business in multiple ways. Because you’re often buying in bulk quantities, a good deal or discount can have a significant impact on your bottom line, and a strong relationship with a supplier can mean better deals and a greater willingness to negotiate. It can also mean more certainty and less price fluctuation in the long term.

A good supplier relationship results in more trust and transparency when supply chain issues crop up or cash flow is limited. And because your suppliers provide you with the goods and services you need to create your own offerings, the quality and timeliness of those goods and services has a direct impact on your final product. By taking care of your suppliers, you take care of your own business as well.

How Do You Establish Good Relationships with Suppliers?

Now that we’ve determined what sets a supplier apart from a vendor and why a good relationship matters, how do you create and maintain one? Like other kinds of relationships, it takes work, but maybe not as much as you think. Here are some ways to strengthen connections with your suppliers.

Communication is Key

Communication is an essential part of any relationship, including a business one, and there are many ways that it can help build and strengthen ties with your suppliers.

Keep them up to date

Don’t let the only time you talk to your suppliers be when you need something or a problem has arisen. Let them know what your plans are, what changes might be happening in your organization or your product line, what new strategies you may be adopting. If they know your needs are changing or a new point of contact is coming aboard, they can prepare in advance, allowing them to be better able to meet your needs without having to scramble. Not only does this benefit you, it shows them that you respect their time and needs.

Good communication is especially important if you realize you’re going to miss a payment deadline — it’s always better to be open about this rather than reveal it at the last minute, or force a supplier to chase you for it. Talking to your supplier early on allows them to plan around it and gives both parties an opportunity to find a solution that will work best for both of you. It also demonstrates consideration for your supplier and can increase their trust in you.

Ask for feedback

Whether things are going swimmingly or you’ve hit a rough patch, ask your supplier for input. You may discover areas of friction that they didn’t think were worth bringing up, or learn ways to upgrade your partnership from “good” to “great.” Even if the supplier doesn’t currently have any feedback to offer, the simple act of asking can increase trust and make them feel more inclined to speak up next time they have a problem or suggestion.

Be Aware of Cultural Differences

Today more than ever, we’re working with companies and people from many places around the world, with their own cultures, languages, and beliefs. You don’t need to become an expert on your supplier’s culture overnight, but be aware that something you consider inconsiderate or strange might be the norm for them, or vice versa. Do some research, ask questions, and take some time to understand the people you’re working with. Your relationship will be stronger for it.

Understand Your Supplier’s Business

Learn about the company’s capabilities, locations, and strategies. When you know both their limits and their goals, it becomes easier to understand how you can make the most of their services without asking for parameters the supplier is unable to deliver. It also allows you to identify future opportunities to collaborate and grow together. Look at your supplier as a partner rather than just a transaction.

Be Someone They Want to Work With

Paying on time is an obvious one, but still important. Treat them the way you want your own buyers to treat you: don’t make them hound you for payments, and let them know about unexpected delays or other issues. Listen to and follow up on feedback. Make sure they have all the information they need to fulfill your orders, and get that information to them in a timely manner. The easier you are to work with, the more inclined they will be to continue working with you. And if they like you as a customer, they may come to you first with new products or opportunities, or offer you a more favorable deal than you would be able to find otherwise.

Also, if you like working with them, tell other people! Word of mouth can be a powerful tool, and bringing them new opportunities may help them grow and improve their capabilities. In addition, they may decide to return the favor by recommending you to others as well.


Set clear expectations for your business relationship and write them down. Service level agreements (SLAs) and supplier relationship agreements (SRAs) document what both parties expect from each other in terms of products, services, prices, delivery and payment terms, key metrics, and more. Starting a venture with explicit documentation means both parties will be on the same page, and provides a written record that can be referred back to in the case of problems or uncertainty.

Be the Type of Business Partner You Want to Work With

In the end, to build a good long-term relationship with suppliers you need clear communication, follow-through, and respect. Treat your business partners well and you’ll likely find yourself with more opportunities, cost savings, and even a better final product.

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