Are you looking for someone to help you fill in a missing piece in your business or start up? Who do you need- a Vendor? Partner? Or both?
Most of my professional entrepreneurial career has been spent in distribution, wholesale and retail environments both online and through brick and mortar physical locations. Up until ten years ago, the majority of my relationships had been built on the vendor side. Now, the majority of the relationships I seek are partnerships. Big switch. Do you want to know why?
Vendor relationships are transactional in nature. I will do this for you and you will do that for me.
Partner relationships also have this transactional element but when or if things go wrong in the business, and you need to pivot, a partner is in it with you (hopefully) for the long haul if they are really your partner. A partner will weather a storm with you, and even change the way your relationship works to help keep moving towards your shared values and goals whereas a vendor won’t.
In a vendor relationship you rarely can deviate from the structure of your relationship they established with you and likely dictated more or less. Usually those terms and conditions are predetermined by the vendor and don’t vary greatly from customer to customer. In a vendor relationship you must conform to them or chances are great that you will part ways.
Anywhere you need a cookie cutter approach- a plug and play- a vendor relationship will likely be your best bet. Whereas in a partnership, values and shared goals drive the relationship so both parties should be willing to find a new approach to solve problems and be flexible in order to keep moving towards the business goals.
If you are looking for a partner, be careful because you might have a vendor in disguise. In some ways, both kinds of relationships look the same:
- Both require expectations, from either side, to be clearly established.
- Both expect the other to respect their time and honor their word and do what they say.
- Each fills a different role in the relationship to make it work.
- The relationship is designed to be mutually beneficial.
As a young entrepreneur, who started my first business at the age of 17, it was not easy to convince the average 10-100 million dollar (in sales) vendor/manufacturer to sell to my company when I had no track record. I remember well doing A LOT of proving and ‘hoop jumping‘ to convince them that I was capable of moving their product and that they would be well served by bringing my company on board as one of their customers.
While vendors talk a lot about looking for ‘partners’, what they are really looking for is customers who they can rely upon to pay them cash upfront or on terms that you may or may not have been able to negotiate any part of with them. To a vendor, conforming to their selling structure is the kind of ‘partner’ they would like to have.
Cultural compatibility is a prime driver of collaborative success between organizations. If you need a vendor, make it your business to understand your vendor’s business culture, and whether it will mesh with your own. Cultural incompatibility can “break” any project—even if the solution they provide itself is good.
While it can certainly be challenging to build a vendor relationship, don’t settle for it if what you really need is a partnership.
Vendor and Partner relationships differ substantially in several ways:
Partner-relationships begin from a place of shared values and goals. While they are sure to evolve into a transactional nature, the relationship is built first and is sustainable on its own well before the business relationship ever starts.
In a partnership, shared vision and goals determine the way the relationship is constructed, as well as on what terms a business relationship is defined. For example, maybe you have built a reputation as an excellent interviewer and want to launch on online biographical magazine. Your partner might be a content provider who has helped other establish online digital brands. You may both share a love for great content and digital media but by leveraging each of your strengths you each bring different complimentary skills to the table that can improve the quality of the product for your customer.
While a great partner might have some ideas, based on their experience, around what would and would not work in the space you want to enter, a partner will not try and hold you to only one way of accomplishing your goals. Instead, they are likely to want to explore whatever makes sense as long as the way you operate together is lean, efficient and mutually beneficial.
There are three vital steps to partnering success:
1. Determine what it is you need but don’t have: customers, capital, special expertise, products, production capacity, or distribution channels.
2. Determine who has what you need.
3. Ask them for it, but, first make sure you have something they want or need. (this last point is the most important)
Partnering has proven itself one of the most powerful business tools for dealing with fast changing markets, technologies and customers. As the global economy speeds up, partnering is becoming the weapon of choice for today’s successful competitors.
While partnerships offer many ‘perks’, they take longer to develop and define. And sometimes they don’t work out after a significant investment. This can make vendor relationships look more attractive because it is far more likely that the terms and conditions will be able to be spelled out much faster in these kinds of relationships. The question is, do you need a short term solution that a vendor can immediately fill for you or do you need a long term one that the might require some twists and turns before the path is clear?
While there are no guarantees that a partner will in the end be willing to go along on your journey, the rewards for finding someone for the long haul are immeasurable regardless of which path you choose.
Both vendors and partners offer different kinds of solutions to the problems you need to solve in your business. Just be sure regardless of if you choose a vendor or a partner that you take the time you need to vet either carefully.
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