VENDOR MANAGEMENT

Managing your vendors requires much more than performing a background check. Without the right solution, the vetting process can be tedious and complex. Missteps and errors can cost you: increasing expenses, risk and fraud.

Vendor management allows you to build a relationship with your suppliers and service providers that will strengthen the service provider but also the condominium. Vendor management is not negotiating the lowest price possible but constantly working with your vendors to come to agreements that will be mutually beneficial.

Share Information and Priorities

The key to succeeding in vendor management is to share information and priorities with your vendors. That does not mean that you throw open the accounting books and give them user IDs and passwords to your systems.

Appropriate vendor management practices provide only the necessary information at the right time to allow a vendor to serve your needs better. It may include repair logs, reserve fund study, changes in building structure and building demographics.

Balance Commitment and Competition

One of the goals of vendor management is to gain the commitment of your vendors to assist and support the condominiums operations. On the other hand, the vendor is expecting a certain level of commitment from you. It does not mean that you should blindly accept the prices they provide. Always get competitive bids.

Allow Key Vendors to Help You Strategize

If a vendor supplies a key part or service to your building, invite that vendor to board meetings that involve the area they work with. They are the experts in that area, and you can tap into that expertise to gain long term value for the building.

Build Partnerships for the Long Term

Vendor management prioritizes long-term relationships over short-term gains and marginal cost savings. Constantly changing vendors to save a penny here or there will cost more money in the long run and will impact quality. Other benefits of a long-term relationship include trust, preferential treatment and access to insider or expert knowledge.

Seek to Understand Your Vendor’s Business Too

Remember, your vendor is in business to make money too. If you are constantly leaning on them to cut costs, quality will suffer, or they will go out of business. Part of vendor management is to contribute knowledge or resources that may help the vendor better serve you. Asking questions of your vendors will help you understand their side of the business and build a better relationship between the two of you.

Negotiate to a Win-Win Agreement

Good vendor management dictates that negotiations are completed in good faith. Look for negotiation points that can help both sides accomplish their goals. A strong-arm negotiation tactic will only work for so long before one party walks away from the deal.

Come Together on Value

Vendor management is more than getting the lowest price. Most often the lowest price also brings the lowest quality. Vendor management will focus quality for the money that is paid. In other words: value! You should be willing to pay more to receive better quality. If the vendor is serious about the quality they deliver, they won’t have a problem specifying the quality details in the contract.