by Loretta Hirsch
Whether it’s catering for a holiday party or a box of branded coffee mugs—companies of all sizes and industries partner with external vendors who have the expertise to make it happen. Vendor relationships can be especially rewarding if you know how to choose the right fit. Here are some quick tips:
Establish a budget
Be realistic and set both an ideal and maximum budget to allow yourself room to negotiate with your vendors. Your ideal budget will be the amount of money you want to spend, and your maximum will be the absolute most you can afford.
Gather your requirements
It's hard to select a vendor if you're not sure what your requirements are. You need to begin with as many vendor requirements as possible. It may be too late to uncover missing requirements after a vendor has been selected.
Determine your selection criteria
This can be the hardest part of vendor selection. You must map the vendor capabilities against your requirements and weighting factors to determine which vendor most closely meets your needs. You can also interview the vendors and make vendor site visits. Or, consider an RFP (request for proposal) process to get an apples-to-apples comparison.
Contact references
Look at the track record and reputation of each potential vendor. Ask your colleagues whether they've had experience with them, and ask for their honest impressions and opinions regarding level of service, product quality and consistency.
Make final selection
In many organizations, the project team makes the final recommendation and then turns the process over to the decision maker (i.e. company owner, CEO, President, etc). However, at this point you should have all the required information to make the choice.
Negotiate
When the final selection is made, you may still have to negotiate a contract or license. Assume everything is negotiable. Always asks for extras and let them know you are shopping around. If negotiations aren’t satisfactory, be prepared to move on to your second choice.
Firm up the contract
Get everything in writing, including written confirmation of any informal agreements or changes made after the contract is signed. Make sure you understand every part of the contract and include a clause stating that any charge not written in the contract won’t be paid. Vendor contracts generally protect the vendor – make sure your interests are protected as well!
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