Buyers spend most of their time meeting and talking with vendors—negotiating the next deal, trying to get an item for next week’s circular—but, too often the conversation focuses only on the hot topics. Sometimes vendors meet expectations. Sometimes they don’t. But do your vendors even know what you expect from them? Do you?

Vendors can do a lot more than just sell you a good product at a good price. Vendors can help support your objectives, if they know what your objectives are.  Every buyer has a plan for the department, but the vendor rarely knows that plan except on an ad hoc, piece-by-piece basis. When you break the department plan down by vendor, and then share it back with them, vendors have a new level of insight into your expectations. They can also tell you how else they would like to support you, whether in the form of in-store events or targeted products or additional advertising. Remember, vendors often have more expertise at this than buyers—they have the perspective to know what is working, and not working, for their products in other settings.  Start building a relationship with them, and they’ll start sharing this insight. Most vendors tend to want to be in your store more than you realize.

Make vendor planning an integral part of merchandise planning and assortment strategy

Before you can manage vendor performance, you have to understand your own objectives. Ideally, vendor planning should be integrated with merchandise planning . The basics of vendor planning include setting sales, gross margin, and inventory turn targets that tie back to your merchandise plans. You may know that one vendor can do five-percent growth and that another will be flat. Beyond that, you should also think about your overall marketing objectives and how you want your vendors to support those through advertising, product development and promotions.

Let branded vendors know their place in the assortment, how they are being positioned and the role of their product in the assortment plan. Will you need a high-visibility product for Black Friday? What aspects of the brand are most important to the merchandising strategy? Is the brand being positioned for its perceived quality or as a trend-leader?

Consider supply chain strategies as they relate to your merchandising plan. If continuous replenishment is part of the strategy, can the vendor support direct store delivery?  Will warehouse delivery be sufficient?  Is it better to negotiate returns or markdown support?  Could the vendor do anything differently with packaging to reduce supply chain costs and delivery time?

While some buyers may be uncomfortable sharing this level of information, discussing it with your vendors reduces the frantic last-minute churn that occurs when you need a product for next month’s circular or you just realized that a special sales event requires floor-ready display.

Managing vendor performance should a be a cross-functional and cross-departmental activity informed by the big picture of total vendor profitability. Especially for key vendors with multiple buyers, make sure that all of those department numbers are rolling up. Each buyer will still have their own plan, but the marketing strategy across departments should be aligned. Teams should meet regularly to review overall vendor performance and develop a single voice on expectations going forward. Communicating a strong and unified position to the vendor will ultimately drive better results.

Own the plan, but make the vendor own execution

Creating vendor plans will take time and effort, especially at first.  However, the intent is not for all of the effort to stay with the Buyer. The onus for driving the plan is the vendor’s. Involve them in the development process, but then let your vendors know that you expect them to track their own performance and to be proactive with solutions and ideas to support your business even better. Set the bar high and your vendors will likely surprise you!

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