You get a last-minute call from a top customer for a 1,000-piece order. Who are you going to call? You will reach out to the vendor you can count on, that’s who!

Vendor management allows you to build a relationship with your suppliers and service providers that will strengthen both businesses. Vendor management is not about negotiating the lowest price possible. Vendor management is constantly working with your vendors to create partnerships that will mutually benefit both companies.

Promotional Consultant Today shares these top tips for vendor management.

1. Share information and priorities. The most important success factor of vendor management is to share information and priorities with your vendors. Appropriate vendor management practices provide only the necessary information at the right time that will allow a vendor to better service your needs. This may include limited forecast information, new product launches, changes in design and expansion or relocation changes, just to name a few.

2. Balance commitment and competition. One of the goals in vendor management is to gain the commitment of your vendors to assist and support the operations of your business. On the other hand, the vendor is expecting a certain level of commitment from you. This does not mean that you should blindly accept the prices they provide. Always get competitive bids.

3. Allow key vendors to help you strategize. If a vendor supplies a key part or service to your operation, invite that vendor to strategic meetings that involve the product they work with. Remember, you brought in the vendor because they could make the product or service better and/or cheaper than you could. They are the experts in that area and you can tap into that expertise in order to give you a competitive advantage.

4. Build partnerships for the long term. Vendor management seeks long-term relationships over short-term gains and marginal-cost savings. Constantly changing vendors in order to save a penny here or there will cost more money in the long run and will impact quality. Other benefits of a long-term relationship include trust, preferential treatment and access to insider or expert knowledge.

5. Seek to understand your vendor’s business too. Remember, your vendor is in business to make money too. If you are constantly leaning on them to cut costs, either quality will suffer or they will go out of business. Part of vendor management is to contribute knowledge or resources that may help the vendor better serve you. Asking questions of your vendors will help you understand their side of the business and build a better relationship between the two of you.

6. Negotiate for both. Good vendor management dictates that negotiations are completed in good faith. Look for negotiation points that can help both sides accomplish their goals. A strong-arm negotiation tactic will only work for so long before one party walks away from the deal.

Whether you’re a multimillion dollar company or a small business with a few employees, these vendor management tips will create a win-win for both businesses.

Source: Jim Bucki is the director of computing technology at Genesee Community College. He serves on several committees at the college and in the public sector that provide expert insight on efficient operation of organizations. His wide variety of experiences across multiple industries has given him the ability to see where opportunities for improvement lie. Most recently he led a team of representatives to investigate the possibility of outsourcing some of the county’s operations.