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The 3 Main Reasons to maintain Back-up Vendor Relationships

While it’s very comfortable to have a “push-button” outlet for your hardware needs, sometimes there are events happening behind the scenes that you are not aware of.

1. PRICE HIKES         

It’s human nature and good business to charge what the market will bear. If a vendor feels they are alone in the field, your price and the vendors profit margin will creep up. Best to take trust out of the equation: price check them against other vendors. If you’re a homeowner, don’t you get a minimum of 3 estimates for any major repairs or renovations? Do you shop for important things, or do you just buy the first thing you see? Keep everybody honest.

2. NAME CHANGES / MERGERS & ACQUISITIONS

Firstly, name changes are just bad news. If you haven’t kept your company name clean enough to retain it, buyer beware! Most honest companies cherish the name recognition they’ve fought & sacrificed for. Who gives that up easily? Very prevalent in the construction industry – a license gets so many complaints against it, the owner moves on and works through somebody else’s license. Often, a “merger or acquisition” is a cover for a name change – new emails, new phone numbers, same old company. Bear in mind, many companies that change their name will often drop their prices temporarily as an enticement to their clients to stay with them. A dangerous move, since the reason for the name change, no matter what it is, will typically include financial difficulties.

As for true mergers and acquisitions, the benefit goes to the two companies involved – not to the customer. Textbook case: Verizon & Frontier. The service declined so precipitously that Frontier is actually the subject of class action law suit.

Check out the acquiring company – how solvent are they? How long in business? Do they have a decent looking website (or is it just thrown together?) How old is their domain name? How are their consumer & BBB ratings? How much of the staff that you knew are still there? If you are in a situation like this and you haven’t been sampling quotes from other vendors: do so. Don’t be scrambling when your orders aren’t met, and don’t be forced to try someone new randomly - out of the phone book (remember those?) or the second one down in a Google search.

3. PRODUCT AVAILABILITY

What happens when your only vendor can’t deliver, or can’t deliver on time? Maybe you need 3 Dell R730s yesterday (it happens – you don’t want it to, but it does), and your only vendor doesn’t have it in stock. He has to order it from Dell and that takes time. You can order it directly, but if your vendor moves any volume at all, you won’t get the price point he does. Maybe now it’s time to throw a crumb to that guy who calls you every month. If he’s still there, he’s selling something to somebody – and any of his loyal customers will most likely come before you. Still, as a professional, he’s going to do his solid best to take care of you – he hasn’t been calling all this time for nothing, and a good rep keeps many plates spinning in the air at the same time.

Guess what?  he has them. Ships the next day and you’re saved. Not a reason to kick your old vendor to the curb, but a good enough reason to keep your bases covered and give the other vendor a little play now and then.

Throwing a bone to the persistent vendor, the person asking for your business every month, may actually open your eyes a little. Does your vendor guard every purchase like a mother hen? If it’s damaged in shipping do they step in and make it right, or is it a case of “Here’s your tracking number- fight it out with HP”? How’s their follow-up in general? As soon as you send them the P.O. are you handed off to other people down the chain? Maybe the other guy is better.

Know your options.

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