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Five tips to form stronger vendor relationships

Sunday, April 1, 2018 - 07:00
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Industry veteran Donald Harrison likes to tell the following story about how he learned one of the most important lessons of his career just several years before retiring. 

Early one morning he was waiting to check in a special customer—a long-time friend and the head of the local chamber of commerce. The man didn’t show at the appointed time. Instead, an hour later Harrison fielded an irate call from the now-enraged customer who said he had gotten into a verbal altercation with one of his workers. The incident was so ugly he chose to drive away rather than to speak directly to Harrison because he need time to cool down. 

(Photo courtesy of Nagy’s Collision Specialists) Working successfully with vendors means getting to know all of them as personably as possible—from your paint, parts and products reps to the folks running the vehicle rental counter. All are your business partners.

Harrison apologized profusely and began performing an investigation. It turned out his staff wasn’t at fault. The customer had encountered an employee from a company that supplied uniforms, shop rags and other materials. Harrison contacted the company only to be told by a disinterested service rep the matter would be “looked into.” Further investigated showed the company had a reputation for bad behavior and had been blacklisted by other local businesses. Eventually, employees came forward to report their dislike for the vendor. They hadn’t said anything soon because they didn’t believe it mattered. 

Harrison took two important actions. He replaced the company with a competitor. Then he sat down with shop ownership and staff and performed a thorough review of all the shop’s vendors. They re-examined contracts, re-engaged with existing suppliers and rethought their entire approach to this part of their business. Next, they went through a process where they re-envisioned the shop as an all-new business and focused on partnering only with those companies who shared their values. 

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The results were significant. Service levels increased, costs fell, and the shop had access to benefits it previously overlooked. Perhaps most important, “We discovered that who you do business with is just as important as how you do business,” says Harrison.  

Could your shop use a similar boost? It might be time to re-examine vendor relations to ensure your business receives the maximum benefits. Use the following five tips. 

Tip 1: Seek service excellence. If shops had to make a list of the most important features they want from their vendors, service and costs would both finish near the top. Bruce Halcro, secretary of the SCRS and owner of Capital Collision in Helena, Mont., says service is most important. “We work in a rural area so a lot of our vendors are hours away,” he explains. “We rely upon people doing the job we’re asking. For example, if we’re supposed to get a part in on a certain day, we can’t have a vendor make a mistake and not deliver what’s promised because it really hurts our cycle time.” 

This factor is equally important to shops operating in more urban areas where they have more vendors to chose from and shorter supply times. Reliable service still matters. While having access to multiple vendors for the same products can be beneficial, it also can add some complications. The more vendors a shop works with, the more relationships it must maintain. There also can be pricing and other differences that must be worked back into a repair order. You’re far better off working with one vendor who offers top-of-the-line, reliable service versus juggling multiple businesses you haven’t formed a tight bond with. 

(Photos courtesy of Sherwin Williams) Vendors help you and themselves best when they keep you properly supplied and serviced (as shown). Keep an eye out for any overstocking issues.

Tip #2: Contain costs. That world-class vendor you select also should be offering competitive pricing, including discounts for the products you use most often. Kye Yeung, SCRS Chairman and president of European Motor Car Works in Costa Mesa, Calif., recommends looking for vendors who offer discounts or incentives on bulk orders, returns and one key area, shipping. “You don’t want to pay $5 for something like washers and then find out the shipping cost $15,” says Yeung, adding, “Any savings, even small ones, count.” 

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