As soon as your business starts growing, vendor management can go from a daily one-hour routine to a complicated, frustrating process. If you try to google vendor management advice, the best thing you get are thinly veiled advertisements for vendor managers’ (pricey) services. In this article, you will find the alternative to that.
I won’t try to talk you out of hiring a vendor manager if you need one and can afford one. If your business has grown enough, keeping yourself short on employees is a sure way to mistakes, bad service, and drops in sales. However, if your business is still *getting there* and you are carrying most of the weight on your shoulders, there are ways to keep it simpler and more effective. Let’s see how.
The principles of good vendor management
Vendor management is an umbrella term for a wide range of tasks, including:
- Researching and finding vendors
- Negotiating prices, capacity, turnaround time, and contracts
- Managing workflow – assigning work, evaluating performance quality
- Managing payments
Multitasking all of these things takes a lot of time and focus – as your business grows, you may catch yourself focusing solely on this part of the job. The efficiency of your vendor management relies heavily on the strong footing it gains in the early days of your business. This foundation is built upon the following principles.
1. Know your business goals
By knowing your business goals, I don’t mean knowing that you want to become a millionaire. Knowing your goals means setting the realistic expectations for yourself, your partners, colleagues, and vendors – and meeting them consistently.
Knowing the exact number of products you want to make in one month makes it easier for you to understand how much material you need, when you need it and how often you need these supplies. These details will help you choose the right vendors.
2. Research
Once you understand your goals, you need to find the vendors that can meet your requirements. I cannot overstate the importance of good research at this point – learn everything you possibly can about each vendor on your list.
There are many factors you will rely on when you choose the right one – maybe your deadlines are not so tight so you can afford to go for the cheaper offer. If fast service is non-negotiable for the success of your business, you will probably be willing to pay more for the vendor that is known for great turnaround time. Keep in mind that what works for your neighbor’s business doesn’t necessarily have to work for yours.
When you choose vendors, don’t go for short-term solutions. Focus on building strong relationships built on honesty, trust, efficiency and mutual support. Not only will this create a healthy atmosphere and efficient workflow, but it can also save you money if your vendors decide to supply their products to you for a discounted price.
3. Communicate and compromise
The relationship with your vendors needs to be nurtured on a daily basis. Communication is the key to making sure that daily, weekly and monthly goals are met with efficiency. It also enables you to detect any problems in your supply chain in the early stages. This can help you deal with any challenge early on, and adapt your business strategy along the way.
Vendors are your partners – so treat them as such. They are in this business for the same reason you are, so understand that focusing on the win-win solution is the key to building a good foundation for vendor management.
Sometimes, unexpected things may happen, and your vendors may not be able to meet your goals. If this situation is not a result of lenient work ethic, try to show understanding and reach some kind of compromise, as this can only strengthen your relationship.
4. Make long-term plans
You and your vendors are in this together – so if you are holding a meeting on the future of your company, make sure they are invited too. As you are developing the product, your vendors can be an invaluable source of advice, feedback or even new ideas.
As I previously said, when you are choosing a vendor, you are choosing a long-term business partner who can be detrimental to your success or failure.
Best Vendor Management Tools
Now that we went through the foundations of vendor management strategy, let’s move on to the ways you can make it a reality. As we mentioned, hiring a vendor manager is one of your options. On the other hand, if this is not a possibility, several online tools are a great alternative that will help you keep your vendor management neat and effective.
I searched review website Capterra for top-rated vendor management software. I additionally analyzed them based on the tools that will allow you to uphold some of the most important vendor management principles. Let’s see how they fared.
1. Gatekeeper – One Size Fits All Vendor Management
Gatekeeper is cloud-based vendor management solution that holds a 5-star rating based on 24 reviews. It is hard to find any fault with this vendor management software, as a quick glance through its features will show an exquisite amount of features. Long story short, if you can think of it, Gatekeeper has it.
Gatekeeper’s contract management features will allow you to manage your suppliers, draft contracts, sign and store documents, assign and approve tasks, track milestones, and tasks’ completion tracking, manage your product’s lifecycle, etc.
Furthermore, vendor management features include:
- Audit Management
- Contact Management
- Customer Database
- Self Service Portal
- Supplier Master Data
- Transaction History
- Vendor Maintained Profiles
- Vendor Managed Inventory
- Vendor Performance Rating
- Vendor Qualification Tracking
This is only the beginning. There are plenty of added properties in contractor management and procurement features.
Recommended to:
Beginners and established businesses – the tool is equipped with features that support any stage of vendor management development.
Pricing
As you may expect, such a well-rounded software does not come for free – at least not after a free demo based on your needs. You can request it from the Gatekeepers team here. Gatekeepers offers four pricing plans.
2. Procurify – Small and Mid-Size Players Focused on Finances
Vendor management is only a part of Procurify’s offer. This software specializes in spend management solution for mid-sized businesses. In that sense, it can be a great multifaceted solution that covers several departments in your business. However, Procurify recently rolled out a special plan suited for small businesses.
Procurify’s vendor management features include:
- Audit Management
- Contact Management
- Customer Database
- Self Service Portal
- Transaction History
- Vendor Maintained Profiles
- Vendor Managed Inventory
- Vendor Performance Rating
- Vendor Qualification Tracking
Small Business package includes these features.
According to reviewers, Procurify is easy to use, rich in features and particularly strong in vendor management field. Their customer service also received great scores, and most of the criticism focused on minor problems – although some reviewers complained that pricing has gone up lately.
Recommended to:
Beginners and mid-sized businesses in need of a management platform that can boost efficiency in several departments.
Pricing
Procurify offers a customized free demo, and three plans for different mid-size businesses.
However, you have to contact Procurify team to learn the exact prices, which shouldn’t be too difficult with the pop-up chat window on the Pricing page.
3. ProfileGorilla – Vendor Management on a Budget
ProfileGorilla’s mission is to be the meeting point for your network of vendors, suppliers, and contractors – and most important of all, it will allow you to do it for a fraction of price set by their competitors.
Despite its low price, ProfileGorilla software is nothing to sneeze at – it wraps onboarding features, contract and vendor management into one powerful tool. Contract and vendor management features include:
- Approval Workflow
- Buy Side (Suppliers)
- Completion Tracking
- Compliance Management
- Contact Management
- Document Management
- Full-Text Search
- Government Contracts
- Lifecycle Management
- Milestone Tracking
- Sell Side (Customers)
- Specialty Contracts
- Version Control
Vendor management features will allow you to conduct audits, manage contacts, and keep an extensive customer and supplier database. These features will also enable you to create vendor maintained profiles, vendor managed inventory, and conduct vendor performance rating and qualification tracking.
Recommended to:
ProfileGorilla is a perfect solution for business beginners on a tight budget.
Pricing
ProfileGorilla offers three pricing plans – and one of them even comes for free.
Conclusion
With a small learning curve and patience, vendor management does not require hiring expensive consultants. We’ve shown you what are building elements of a successful vendor network, and the tools we analyzed are going to help you nurture and develop this network further.
Now, why stop there? Starting and developing your business is a neverending learning experience. As a business owner, you may also be someone’s vendor. On top of nurturing the existing relationships, it is also important to start new ones. If you want to discover the secrets of boosting business-to-business sales, click here and learn how to utilize content marketing to sell your products and services!
