Don’t we develop a relationship with the fellow sitting at the nearby grocery shop from whom we need to purchase vegetables everyday? Likewise in the world of business, we tend to develop relationships with the people we deal with everyday. Amongst the different kind of relationships which exist in the business world, the buyer-supplier relationship is the most important one.

Conventionally, the buyer-supplier relationship was considered to be distant, adversarial relationships. The relationship was determined by the fact that every party intends to maximize its resources, cash investment and time. However with passage of time, the relationship has adopted a collaborative approach. Therefore for a successful relationship, the existence of a mutual business understanding is essential. Moreover, the relationship needs to be cemented with trust and respect. In addition, one needs to recognize that the success of one partner is essential for success of the other one.

So what could lead to a win-win relationship between a buyer and a supplier? We can attain the best buyer-supplier relationship by focusing on certain business tenets:

a)    Compliance with necessary regulations.

b)    Conduct which breeds respect, open communication and honesty.

c)    Finance

A business transaction cannot be conducting without knowing the other party. One cannot plead ignorance if you are found conducting transactions with restricted parties. Several governments across the world have listed certain parties with whom one must not conduct business. Therefore, it is binding upon the exporter or importer to ensure that all the parties which form a part of the supply chain have received approval from the concerned authorities.

After the prospective partner is granted legal and security clearance, any organization can go the next stage of approval. Since the present business environment is inclined towards social responsibility, one need to be careful about its presence or absence across the supply chain. Moreover, business owners need to ensure that products are sourced from the suppliers who comply with the codes of conduct.

Finance remains the most critical aspect of a buyer-supplier relationship. While a buyer needs to get a fair price, a supplier needs to ensure that he/she covers the cost and makes a profit also. However, the other crucial aspects of negotiation include quality, reputation of the party and mutual trust.

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