How to Manage Vendors

Vendor management is one factor that must not be overlooked by business owners. When you deal with them, your business becomes their customer, the reason why you must know how to manage vendors.

Being aware of these things will ensure an amicable consumer-vendor relationship.

Being the customer, you will surely work with several various vendors, such as software vendors, agencies and system integrators. There might be instances when you feel unimpressed with the deliverables that they offer you. Professional experienced vendors are already adept when it comes to managing and at times, milking the customers they serve. Yet, what are the things that you should do to properly manage the difficult vendors so that you will still be the one in charge?

Talk to Vendors

A nice thing to do initially is to just strike a conversation with your vendor. Regular weekly or monthly conversation, whatever your preference might be, will surely help you in avoiding any misunderstandings. Conversations like these can give useful insights of how your vendor works, allowing you to easily spot things that are already veering toward the incorrect direction. If a few things go wrong, an open relationship will help a lot to easily solve whatever the problems might be. Regrettably, these dialogues are not enough to give solutions to all the problems. Aside from a regular talk, it is also recommended that projects will be divided into much smaller parts. This only means regular deliverables which will lessen risks, keeping the vendors still on their feet. Also, another advantage is that you will have the chance to look for other alternatives in a faster way in case that the relationship starts to get sour.


As a customer, there is also a need for you to have good contacts which will encompass a few control mechanisms in order to keep your vendor on the right track. Your vendor must also have substitutions. Being the customer, you must have the right to veto as well as get some fair compensation in case they decide to remove their star programmer or prime project manager from the business you have at hand.


The ownership must be something that resides in you, especially when the payment is already made. Whatever the thing you have bought, whether it is coding, strategic work, PowerPoint slides or nice colors, see to it that the stipulation of your vendor recognizes you as the one who owns all and not just the final deliverables. This goes to say that if you choose to go separate ways, the job can still be taken to another vendor.

Schedules of Payment

There is big need why you have to pay close attention to the schedules of payment. Keep in mind that there is no need to pay vendors the full amount even before the complete delivery is made. The really tough customers even ask for compensation if there is a delay in the project. Although it might seem to be overkill, especially if the project is just a small one, things that are financially affected can still grab the attention of vendors in this kind of market.

1 Comment

  • MOHD JAMAL said on July 17, 2013
    I want to know specific guidelines for vendor management if you can help. I am in Berlin, Germany


    (All the above fields are required.)