Vendor Management Vendor Management is the process of building a smooth working relationship with your suppliers for efficient functioning of your business. It is a process of continuously working with them to reach agreements that would benefit both parties. Always share your priorities with a vendor. Your vendor is there to provide you with the best solution. When you need many vendors, you need to create a competitive environment by having a pool of credible alternatives. This will make them put the best price on the table. Again this will also keep all vendors on their toes. That is why you need to be wary of "partnerships." With the help of such partnerships vendors may try to compel you to use them. Avoid giving one vendorâ€™s bid to another to beat. It is very important to be respectful to your vendors. Do not ask them to participate if you just do not want to give them your business. When you are respectful towards your vendors, they will have the right feelings towards you and your business. This engenders a good feeling and creates a cordial working atmosphere. While selecting vendors, always look forward to long term goals. If the vendors are here to stay, make it a win-win opportunity for them. If not, choose the best for your company. If they are here to stay, you can have good control over them and curb any desire for short term gains. While negotiating with vendors, always do so with the top two. Evaluate a host of them. But always conduct contract negotiations with the final two. Entering into contracts with the final one entails lots of risks. But with two you make room for stiff competition, and you may soon stumble upon a deal-breaker with the top choice. Treat vendors as your partners or potential partners. Though contract terms are important, no contract can ever cover your expectations or your long-term goals. When you treat vendors as equals you move towards building a collaborative partnership with them. Such relationships pay off in the long run. Managing vendors is a very critical aspect of your business. It requires lot of tact and discretion.