Vendor or Business Partner?

Vendor or Business Partner

So what is it with words communicated to our vendor or business partner, and the finer nuances they proclaim? Try these on for size…
  • I need my order right away ~ vs. ~ When is the earliest you can supply my order?
  • This pricing is ridiculous ~ vs. ~ We are looking at a better pricing
  • I cannot pay you within 30 days ~ vs. ~ We will be pleased to make payment at the end of 30 days.
  • I will reject the order supplied if it does not meet our specification ~ vs. ~ Do ensure that the order supplied meets our agreed specifications, to avoid rejection.
  • Your proposal was not acceptable ~ vs. ~ Regrettably, we were unable to select your proposal.

It is no conundrum, that the statements on the right are the more polite ones. Many of us would like to say that we are active proponents of such communication.

Yet, for those who have been on both sides of the supply chain, the learnings come quicker!

Some organisations believe in calling their ‘Vendors’ their ‘Business (Biz) Partners.’

Yet, in reality, how often do we really consider these biz partners as one of our organisation’s valuable resources?

In the aftermath of Covid-19, many of us have been humbled.

Hoteliers have seen a year of adversity, wage cuts, layoffs, health concerns, tottering businesses & closures, stress, and financial turmoil. The Tourism industry behemoth has been cut hardest at its knees, and it continues to teeter.

The harder hit is the business partner (aka vendor). He does not have a cushion, mostly rotating his cash-flow in a never-ending vortex. Hotel & restaurant inventories have dropped drastically to suit demand, while simultaneously, rates are being squeezed to keep costs low.

Hospitality leaders are in a Catch-22 situation vis-a-vis their biz partners. Sales have dipped drastically, and cash flows are skeletal. Whom do you pay first, your employees or your biz partners?

The answer is a no-brainer.

Statutory & HLP (heat, light, and power) payments must be made; there is no leeway in their payment schedules. The same applies to R&M (repairs and maintenance), wherein parts or services need to be purchased against immediate payment.

So where does the daily supplier normally find himself in the value chain of a hospitality organisation? Truth be told, pretty much at the lower end!

Biz partners want to be acknowledged, feel appreciated, and treated with respect by the management. Then, they are more than pleased to continue, even though other organisations may offer better rates!

Luxury hotels in Goa generally contract serenaders, music bands, and an array of performers, during the high and low season. This has always been a flourishing business for musicians, particularly in this state.

I know of an F&B leader in one such leading luxury hotel, who epitomises the ideal biz partner relationship. He auditions performers, and subsequently finalises contracts meticulously, only after negotiating the least rates amongst five-star hotels in Goa.

Having completed this, he now ensures their comfort, in ensuring their meal arrangements and logistics are suitably taken care of. For the accompanying roadies (if any), he ensures staff cafeteria meal coupons. He ensures that payments are made promptly by the 15th of every month as promised in the contract. Their issues, if any are brought to his notice and he attends to them personally. He checks on their performances oft and on, giving them feedback on the same.

All this has startled the performing artist’s community. For, they have never received this kind of personalised attention at the other hotels.

The result?

Every six months, at the signing of the new contracts, this F&B Leader gets the best rates. He is a hard negotiator and he maintains his costs within levels suited to the hotel’s profitability parameters. The relationship is such that the performers (half a dozen biz partners) never want to leave this gig. I hear that there is a line of new performers, always waiting for an opportunity to enter.

I have seen biz partners being made to wait for hours by Financial Controllers, Hotel Managers, and Owners. These may be potential biz partners seeking entry, or even current biz partners awaiting payments, clarifications, orders, contracts, etc. When these biz partners call, their calls are very often not received, neither returned.

The fact is that we tend to get high on a power trip when we are the client.

In our industry, the bulk of our dealings involve serving guests. Here, we are on the other side of the spectrum, wherein we become the vendor or business partner. In our customer interface, we bend over backward for the guest, in the quest to honour the ‘Atithi Devo Bhava’ code.

The result is that we then get into a mindset that vendors should regularly bend over backward for us too. We demand servicing to an unreasonable level, expecting vendors to feel blessed to have our business.

Why make things difficult for these biz partners? After all, they are necessary to the business. Even as hoteliers and restaurateurs are struggling to remain afloat, so are they. Let’s bring in the element of humanity to these relations, and treat all alike.

Think back to those vendors or business partners who stayed with you even when you may have moved to a smaller organisation. You may discover the reason they did so was the respect, acknowledgement, and appreciation you showed them in the past.

The Ritz Carlton motto – “We are Ladies and Gentlemen serving Ladies and Gentlemen” which we all heartily agree to, may be applied in this context too… right?

This article has appeared in ET HOSPITALITY WORLD.COM February 2020

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