5 tips that will make your suppliers feel like partners.
For new ventures and companies scaling up, it’s often neither practical nor viable to have every resource or service required to run the business in-house. Whether utilities, IT infrastructure, raw materials, or even office space… businesses rely on a network of suppliers to operate efficiently. These external partners are essential to your supply chain, and their performance directly impacts your company’s growth potential.
Building strong, mutually beneficial relationships with your suppliers is vital to increase your chances of scaling successfully. Trust and loyalty are key to these partnerships, as they ensure reliability in times of need and create the opportunity for shared success. Open and effective communication is also key — keeping suppliers informed about any changes or plans helps them plan and adjust their operations, which can prevent disruptions and align your goals.
Additionally, being proactive in understanding and addressing your suppliers’ challenges shows respect and a willingness to collaborate. When suppliers feel valued and trusted as partners, they’re more likely to go the extra mile, offering more favourable terms, better pricing, prioritising your needs, and helping your business thrive.
Build lasting business relationships through trust, loyalty, and open communication.
Here are some practical tips to ensure your supply chain becomes strategic.
1. Treat your suppliers like partners
Lasting relationships are built on mutual respect. Treating suppliers well only when tendering for new contracts but neglecting or mistreating them once the work is secured is unprofessional and damaging to long-term partnerships. This kind of behaviour signals to suppliers that their value is conditional and transactional, eroding trust and loyalty over time.
Instead, businesses should maintain consistent respect and professionalism throughout the supply relationship, from initial negotiations to the ongoing delivery of products or services. Demonstrating fairness, transparency, and a commitment to their success fosters trust and creates a foundation for a durable, mutually beneficial partnership. Suppliers who feel valued are more likely to prioritise your needs, offer flexibility, and contribute to the success of your business in the long run.
A common trap for new ventures is to start treating their suppliers differently as they scale and gain success. That change in attitude makes suppliers who once felt valued and respected that they are now being taken for granted, leading to a breakdown in trust. Long-term suppliers add strategic value - value that ensures a source of competitive advantage.
2. Develop clear, balanced, fair supplier agreements
Some supplier relationships are founded on a handshake; they epitomise trust. As businesses scale, it can become more challenging to capture the scope of supply without some level of documentation. When creating agreements with suppliers, treating those suppliers like partners means the agreements should be balanced and fair. Importantly, recent changes to Australian consumer laws provide significant penalties for companies that cause a substantial imbalance in the parties’ rights and obligations arising under a contract. These new laws protect small businesses that employ less than 100 people or have a turnover of less than $10m. Clarity and balance come from a well-drafted supplier agreement that, at a minimum, should detail the following:
The scope required to be performed or delivered by the supplier
How the supplies will be accepted
The timing for delivery of the suppliers and what happens if the supplies are defective, including warranties required
How and when the supplier gets paid
What happens if something goes wrong, including obligations to negotiate or mediate
When suppliers feel valued and trusted as partners, they’re more likely to go the extra mile.
3. Pay your suppliers within terms
Suppliers are businesses too, and they feel the impact just as much as your company does when payments are delayed. In Australia, debtor days typically range between 48 and 60, according to Dun & Bradstreet. This is well above the standard 30-day payment terms that most businesses aim to follow. It’s clear why suppliers prioritise companies that pay them promptly.
4. Communicate frequently and clearly
Frequent communication with suppliers is key to transforming transactional relationships into strategic partnerships. While not every supplier may require daily or even weekly touchpoints, it’s crucial to recognise that suppliers important to your business’s success demand a higher level of engagement. Having formal agreements on how you communicate with supply partners ensures both sides are aligned and proactive, rather than reactive, in managing supply chain opportunities and challenges. In other words, only communicating when something is wrong isn’t a strong partnership.
For suppliers that are central to your operations, formalised communication channels can take the form of regular meetings, formal reviews, or on-site or plant inspections. Establishing regular interactions—whether weekly, bi-weekly, or monthly—helps keep the relationship strong and ensures that potential issues are addressed before they escalate. This also creates an opportunity to discuss future needs, market trends, and new opportunities, making your suppliers more than just a cog in the supply chain.
5. Your plan is your suppliers’ plan
In Australia, over 97% of businesses are small businesses, meaning that if your new venture engages with suppliers, many are likely small as well. For these suppliers, customer relationships are critical, and your business plans can significantly affect their outlook and operations. Sharing your company’s road map and how they fit into it ensures that your suppliers can plan for the capacity and resources you’ll need.
Trust is built by “saying what you do and doing what you say.” Being transparent with suppliers and involving them in your planning fosters loyalty and prepares them to support your growth. Small businesses are often agile but resource-constrained, so by maintaining clear communication, you create a partnership that allows them to innovate, align with your needs, and be ready when you need them most.
This approach also mitigates risk by informing you of potential supply chain challenges. Making your suppliers part of your strategy ensures they can meet demand and build long-term, mutually beneficial relationships.
One of the most effective ways to strengthen supplier relationships is by ensuring timely payments of invoices.
Need help?
Need help or advice to resolve challenges in with your supply chain? Contact us for help.