It is very difficult to operate a business without good vendors. And upon opening a new venture, you may discover there are not that many to choose from for your main products. This means you need to form a good relationship with vendors from the beginning, establish good credit with them, and keep the deliveries coming on time.
Money and timing of deliveries are at the crux of most vendor problems. You may have had the same customer service representative—or delivery person arriving at your business—for many years, but that could have changed, leading to problems on your end. Prices may have risen, charges may have been wrong on invoices, or you may have caused issues on your end too with late payments.
Whether you are dealing with those who supply food for your restaurant, retail wares for your store, or advertising for your business, the issues and resolutions are usually somewhat the same:
- Have business contracts with all vendors, and include a dispute resolution clause. Make sure you are comfortable with the details, whether vying for arbitration, mediation, or litigation, as well as outlining who will pay for any possible attorney’s fees. In general, plan for how you want to handle any major problems with the vendor, how disputes will be presented—and where they will be resolved.
- Take stock of your relationship with this vendor. How long have you been working with them? How is the quality of their products? Could you be doing better? Know what you want in terms of resolution, and make a list of the changes they could make to keep your business. If there have been problems on your end too, with disorganized orders or late payments, work to rectify those issues as soon as possible.
- Open the lines of communication with the vendor immediately, if you want to keep working with them. If this has been a long relationship and you have been on friendly terms, take into consideration any changes that may have been going on at their company in the past months and give them a chance to explain. The company may have been bought out, jobs may have been cut, or they may have had a temporary problem with their own suppliers.
- Always be fair, but firm. It is important to have the respect of those you work with. And although you are technically a customer in this relationship, you may find that your vendor also acts as a partner—and sometimes a savior when you are in a pinch. That is important to consider before coming on too aggressively or deciding to pull the plug altogether.
- Have a backup plan. If you want to discontinue working with this vendor, be sure you have a least a couple of other options. You may not find the best fit again right away, no matter what deals they are offering. Cutting ties may be a serious decision—but for the best if you are working with a supplier that cannot meet your needs sufficiently.
If you are concerned about a current vendor issue or are involved in a dispute, consult with an experienced business attorney like Shane Coons. Call 949-333-0900 or email us at Shane.Coons@seclawoffices.com. We will be glad to meet with you to review your case and explain your legal options. Our office is here to help!