Dealing With Vendors – Becoming a Client and Not Just a Customer

Article written for Rental Housing Association's monthly newsletter.
By Marty Smith

A customer is someone you sell to. A client is someone you work with on an on-going basis.

When it comes to business, in certain aspects, we are all performing the same function. We buy and we sell. We are all subject to the laws of supply and demand. For the past 10 years, supply has exceeded demand, allowing for a Buyers’ Market. Marketing and relationships were just as important for suppliers as was the price point. Several suppliers went out of business for a variety of reasons, but two were key. Many suppliers were so desperate to get business – they undersold their competitors – but could not cover the overhead with their strategy, so they went out of business. Some suppliers (vendors) knew what the absolute bare minimum price point was that they could sell for to stay in business, but didn’t, because they did not have the relationship with their customers that their competitors did. They did not have clients – they had customers.

Currently the reverse is true. Given the ever-expanding economy in the greater Seattle area, demand is outstripping supply, especially in the construction trades. This current trend is anticipated to continue for the next few years.

An excellent salesman strives to create clients – repeat customers – that will come back with every request for the service, or product that they supply. All that a salesman can hope for is the ability to have a chance at each opportunity. The best relationships between buyers and sellers always allow for a salesman to get the last look. That last look is when a client will come back to you if you are higher than the competition, and gives you the opportunity to adjust your number to meet the competition, or allows you to justify your cost and buys from you anyway. Sometimes this works, sometimes it doesn’t.

Now buyers are at the mercy of the vendors, especially in the construction trades. In the construction world, lead times are becoming greater and prices are going up rapidly. If you are a building owner and do not have a long standing relationship with a contractor(s), but have always bought from the lowest bidder, then you might be in for a shock. Not only will it be hard to find the services you need, when you need them, but the price point you pay will be much higher than what you are used to.

Business relationships are important. It is imperative to develop, and keep, good, long-standing relationships, for both the buyer and the seller. If you have been buying from the same contractor for years, even when they were not always at the lowest price, that contractor will be far more willing to make you a priority now, with a reasonable cost.

Be advised, with the turn in the economy, especially in the construction world, vultures will appear. New “construction” companies will come out of nowhere. Do your homework. If it isn’t urgent, develop the relationship, and wait.

It is now time for the buyer to put on their sales hat.