Finance News & Insights

3 vendor demands you can turn to your advantage


If you haven’t seen these behaviors yet, you probably will soon. Here’s how to handle it.

Supplier Recession Behavior #1: They’re a little more anxious for you to pay them

OK, maybe they’re a lot more anxious for you to pay them. That means your Accounts Payable department is likely fielding a lot more phone calls and e-mails from suppliers about when they can expect a check. Some small business owners we know have even had suppliers offer to come by and pick up a payment, they’re running so tight.

Turn it to your company’s advantage: See if you can make it worthwhile to pay them sooner. If your company can swing it, try to negotiate an early-pay discount.

Not an option? Try pushing for other payment options you may prefer. Using electronic payments can streamline your own payment process and still put money in suppliers’ hands faster and more reliably.

Supplier Recession Behavior #2: They’re requesting more financial info

Business bankruptcies were up 58% in 2008. With scary stats like that it’s inevitable more businesses will be nervous about their customers going under. So it’s perfectly plausible your company will be hit with requests for personal guarantees, letters of credit and other assurances your company will pay. At the very least, some suppliers may ask for updated or more frequent financials.

Turn it to your company’s advantage: If this is a company you want to have an ongoing relationship with, you may have to oblige here.

But while you’re talking about it, consider bringing up your company’s excellent payment history or longstanding relationship with this supplier. And see if that can be parlayed into better terms or even just a little flexibility when and if your company does need it.

Supplier Recession Behavior #3: They’re trying to up-sell, cross sell, etc.

Fearful of a drop in demand, many companies are still trying to purge inventory from their shelves. They don’t want to get stuck with a lot of items they cannot move. Who better to approach than their existing customers?

Turn it to your company’s advantage: There may be a way to cut your costs while suppliers do the same.

The key? Vendor-managed inventory. If you don’t have the warehouse space to take on more product but are in a financial position to do so, ask your vendor if it will store the goods for you. The supplier gets to log some extra sales and your company doesn’t have to take possession of the items until you need them.

It also couldn’t hurt to ask if a supplier would be willing to unload more inventory for a small price cut.

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