Customer Supplier Relationship and Loyalty

After years of experience in the manufacturing, supplying and distribution of sports goods and promotional merchandise one very important aspect and question comes to mind i.e. How loyal is a buyer to its supplier? The truth is either many shades of grey or simply just black and white. From the buyers perspective goods must be competitive, comply with industry standards and should allow a healthy margin for a company to meet its targets and profitability.

Correct Price is important to the customer and so a supplier will try its best to meet this under the given circumstances.However suppliers have a bigger challenge to face in the current economic climate such as: manufacturing factories asking for deposits upfront and balance before the goods are shipped. This cannot be disputed as the overall manufacturing structure needs to meet its raw material, wages, and overall manufacturing costs. Competition for factories is very tough especially in China & India as they struggle to win business from clients. What makes things even tougher are the payment terms by buyers which have increased from 30 to 60 days and sometimes even 90 days. So in other words a supplier is actually funding the client business and wait to be paid until they sell goods. Brightways factory in India tries their very best to co-operate with customers as much as they can.

Businesses are going through challenging times and one needs to work together and not against one other. In order for suppliers to provide the best service at competitive prices it is important that clients extend their customer loyalty hands and do not play the roulette with another supplier to create price war and cause adversarial affect. This can be very damaging as the competitor will try and win the order even by playing a loss leader witch further spoils the market for that particular product thus causing the product doom because no company will be able to sell at a loss for longer period. Many a times an amateur buyer who has changed jobs or position would just like to “try out a new supplier” to prove oneself without much thought to the supplier history. This can be a very damaging exercise from the existing supplier perspective.

Suppliers who have their own factories create their paraphernalia according its product demand. A healthy pipe line of orders from its customer is important for its survival. This can only be possible if there is customer loyalty and efforts are put into solid business relationship building between supplier & customer. Brightways are successfully trying to achieve this with their current and new clients.

Submitted by Mukta Sareen


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