Businesses of all sizes work closely with vendors. These business partners can provide tech support, handle customer service or manufacture products. Companies build these partnerships using contracts, but sometimes the vender does not follow through on the agreement. This can be a mistake on their part, or a strategic choice not to fulfill their obligation.
The breach of contract affects a business’s ability to function and should be avoided when possible. There are ways to build ties with venders to strengthen the partnership. Ideally, this can lead to a win-win situation where the businesses get the products and services they need, and the vendors have relationships that are steady and profitable.
Tips for making it a win-win
This can be done by:
- Explaining priorities: Communicate what you are looking for from them and how they can most effectively deliver it.
- Share information: Involve key venders in strategy sessions and the rollout of new products – they are experts in their field and often can improve or refine ideas and plans.
- Balance competition and commitment: Constantly switching vendors to save a few dollars can mean inconsistency in your products and services, which can hurt a company in the long run. A commitment to the right partner is one less thing to worry about. However, when the contract is up, it is wise to reopen the bidding process to ensure that rates are competitive.
- Draft fair contracts: Rather than strong-arm them into a bad deal, pay them fairly for a quality product.
- Agree on value: Make sure everyone knows the goals for value so you can set expectations.
- Pay your bills: Everyone needs to get paid, and paying your vendor minimizes stress and makes them more open to handling rush jobs or last-minute changes.
Sometimes it still will not work
The above tips can build a healthy partnership and avoid misunderstandings, but breaches still happen. If the two sides cannot sit down and resolve the matter through arbitration or mediation, litigation may be necessary to protect the interests of the company and its future.