The dark side of supplier relationships

Welcome home.  Now you die.

(Photo credit: ? spunkinator)

Some time back I moved into a new house and there was a snaglist of about 20 items that needed fixing in the place. I was able to get hold of a handyman who had been in the business for a few years because he had been retrenched early from a government bank. This repairman got stuck in and did the repairs and minor renovations very well.

Afterwards he completed a whole lot more repairs and renovations. But unfortunately a friend of his died and he got such a fright that he decided to drop all the handywork and go on an extended one-year holiday. When he came back from his travels, he was no longer interested in repair and renovation work because he wanted to life to the full.

That’s an example of a outstanding supplier who went way beyond the norm and delivered quality that is seldom seen from home suppliers. He was so superb that you wanted to give more and more work. There were no comebacks. No mumbles about payment. In fact, he made sure that you were 100% satisfied with his work before he presented you with an invoice. He worked on the repair and renovation jobs quickly and left absolutely no mess. All round it was an extremely pleasant experience.

Once when finding a supplier for outdoor wall, roof and tile repair, I was given a recommendation to use a supplier who had done a so-called excellent job for someone I knew. As soon as the 50% deposit had been paid, the nightmare began. The owner of the building supply company was never to be seen, his workers were undisciplined and underskilled. His business model relied on hiring the lowest skilled workers so that he could pay them as little as possible. His workers lit fires in the garden using spare timber that I had stored specially for backup and chopped down parts of trees in the garden.

Poor quality, overcharging and raking out a project are just some of the more blatant ways that suppliers try to rip you off. But there are more subtle ways. Suppliers may come back even after six months and claim that you still owe them money. When times are hard and the economy is difficult, suppliers will come up with all sorts of “clever ideas” to chisel money from you. They are shameless. They are chancers. That’s why it’s vitally important that you keep detailed records of all transactions with your suppliers. Make sure that you have copies of your proof of payment into their banking accounts because long after the fact it’s going to be difficult and costly to get those transactions from your bank.

Suppliers can also make proposals and if you don’t use their ideas but decide to do something yourself they can come back to you and claim that you have “stolen” their ideas. It pays to give all suppliers a detailed and specific brief. This way you would be able to rule out any generic ideas that they might claim because they lost opportunity to do work with you. Given a high value supply contract, it’s best to get something drawn up by your lawyer.

It’s important to get a clear understanding upfront with web designers about their charges. Like lawyers, some will charge you consulting fees just to talk to them. If they make a tiny update on your website, you may fall over backwards in your chair when you see an invoice that costs more than several tanks of petrol.

Smaller companies aren’t in the position of their larger counterparts where they can have supply chain managers and special supplier qualifications. You’ve got to be much more “awake” when dealing with suppliers even if you get testimonials and references from people you know. You’re not going to see any mention of the nightmares that these suppliers have caused other small businesses.

None of us want sour supplier relations where “everything changes” so it’s best to give detailed briefs upfront, monitor and check work meticulously, and keep detailed records of invoices and payments into their banking accounts.

A cautious approach is best when dealing with any suppliers.

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By Chesney on April 11, 2014 · Posted in Main Content

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