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How to Avoid Working with Bad Vendors

Your relationship with your vendors is critical to the success of your business. However, it can be tempting to just take the first big vendor you find and trust them based on their size. Surely, if they’ve gotten so big, they must be trustworthy and reliable right? However, it’s important to take careful steps to ensure that you are working with the best vendors for your needs. Here are some tips to get the best experience possible with your vendors.


It’s critical that you find a vendor that is easy to work with. Lines of communication should be wide open, and you should always know who to contact in times of trouble. You also should also always work with a vendor that is willing to work with you. A good vendor has a good customer service or works with you directly to make sure that you are happy. Poor product or technical support is common with less-than-reputable vendors too. Phone calls should be returned same day (within reason. If you call at 7 PM on a Friday night and your vendor’s business hours have already ended, you should be understanding of a delay).

It’s not just difficulties being contacted. Look out for issues ordering product. A good vendor will make ordering as seamless and easy as possible to help you order more often. Also watch for a website that is hard to navigate or outdated. It should be easy to find resources and support for the product. Even a vendor that seems too busy for you is a red flag. A company shouldn’t take on so much business that they no longer have time to care for their existing clients.

Wolves in Cheap Clothing

If you find a vendor that seems just a little too affordable, avert your eyes. A cheap vendor may seem like a good deal at first, but be vigilant. Oftentimes a vendor that is too cheap is selling you product that doesn’t work—sometimes a lot of it. When you pay more, often you’re paying for quality. Startups are more vulnerable to this trap because they don’t have the necessary experience and cash flow that make it easier to have your pick of vendor options.




Disclosure and Privacy

A good vendor is not going to fear a non-disclosure agreement. If you run into a vendor that won’t sign your NDA, then you need to run away. Why wouldn’t they sign one, unless they plan on partaking in suspicious or less-than-honest behavior? You shouldn’t have to bend over backwards to accommodate a vendor’s unwillingness to work with your privacy policy. Stand your ground and be firm, and if they won’t cooperate, take your business elsewhere.


References are a great way to suss out problems before they even happen. Does your candidate have references on hand to show you? Have clients volunteered to serve as a reference? Do the references provided answer phone calls and emails within a business day or so? Any vendor should be able to provide at least three good references that are happy to speak highly of the company and their products or services.

Ask about long term relationships with customers. How long has their longest contract lasted? The longer the contracts, generally the better the vendor. Ask about their turnover rate. If it’s high, expect to have some problems, or better yet, just avoid them.

Remember your Vendors

Get to know your vendors personally. Invite them to lunch or dinner and make sure you get along with them and their team. Get a feel for their behavior. Do they drink a little too much? Are they rude to the wait staff? When someone isn’t polite and courteous to you or others outside of work, then they are going to be difficult to work. They might even have an unhappy team of employees that might fail you when you need them the most.

Your vendors are also running a business. Don’t forget that. It’s important to propose terms that will make both you and your vendors happy. It’s a rookie mistake to just search out the most affordable deal. A vendor that feels undercut and neglected will make an unhappy business partner. Remember that your relationship with your vendor is a partnership that should be mutually beneficial. Communicate clearly what you can do for your vendors. Offer to feature their products on the front page of your website, or to make exclusive offers to your clients to promote their products.

Keeping Track

Keep track of the facts – how does a vendor respond to service agreements? How quick is the response? How open are they to new ideas? Does the team present? Is it customer-focused? Don’t forget things like this, because when there are issues they can feel like they pile up fast. Always keep reviewing your vendor’s performance. If you feel that they may be slacking, it might be time to start looking for someone else.


A good vendor also won’t make promises they can’t keep. Their business is all about downselling the product to keep you surprised and happy with their business. Don’t trust a vendor that is just feeding you good news and just telling you what you want to hear in order to land the contract. Vendors shouldn’t be selling themselves to you on false promises.


Conflicts with other partners can happen, but watch out for frequent incidences. Conflict for another company can mean conflict for you down the line. Remember to clearly communicate expectations and boundaries in your negotiations. If you are coming into conflict with your vendor, particularly over something that should have been clear in your contract, it’s time to move on.

Final Word

It’s important not to fall into the traps of managerial impatience and convenience. Just because a vendor is big or available doesn’t mean they’re the right fit for you. However, watch yourself too. Even a good vendor relationship can go bad if you don’t keep up your end of the bargain—pay on time, do your research, and when it seems like things are going south, know when to call it quits and seek new partnerships.

Lastly, let me know your thoughts and what other tips for avoiding bad vendors that has helped you. Leave a comment below and I look forward to hearing from you.

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About Sean Donahoe

Sean is one of the most recognized industry leaders in business and marketing. As a popular speaker, author, consultant he has helped over 50,000 students world wide find success in their businesses and has consulted with Fortune 500 companies and businesses of every size grow and thrive...

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