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STUDENTS' CORNER - 200

In choosing the business partners, factors that influence the choice are generally the availability of alternative partners, reliability in supply which also includes the critical complexity of factors involved in meeting the supply on time and above all supply market dynamism.

In fact choosing a partner for your business is not as simple as it might sound.  Indeed, you must know for certain what you need for your business to sustain and survive, sustain for long and survive stifling competition from your ambitious rivals. In a transaction with your partner, you need just mechanical coordination in the sense that he supplies you the things you need in the required quantity or you need some cooperation from the partner in the sense that he adds some value to the transaction, value being commitment to the supply despite challenges unforeseen tending to impede the supply and sticking to the prices offered despite unexpected price escalation in the market.

Choosing the first one of coordination is easier; but the next one is far difficult since it expects from you constant awareness of the market dynamism and sensitiveness to the market scenario. Of course, your business instinct will guide you through the situation which will strike a balance between coordination and cooperation; you know where to expect coordination and where to seek cooperation.

You might be aware there are some categories of buyer-supplier relationships. A customer comes and buys a product from you and goes off; it is a mere business routine transaction with no depth in relationship; you sell it and the customer buys it; the transaction is fulfilled in the sense that both the seller and the buyer are satisfied with the transaction. Here neither is interested in developing a relationship; to explain a little bit, you won’t mind if the buyer does not turn up for long; you won’t even remember him and the buyer will buy the same product from any other seller depending on his convenience. It is mere a business transaction which is so temporary therefore superficial that coordination and cooperation do not figure in the relationship.

 All the same, no business man can turn his back to transactional business activity. Any business be it small or big is a business and a true business man cannot afford to neglect and negate it. Pennies make pounds.

From this transactional relationship in which both the seller and the buyer are effortlessly replaceable let us move to another kind of relationship which is known as Functional relationship. In essence, it is the relationship of convenience literally. There is a customer who buys say a particular product or service which he gets from you and in the event of you being not there, the customer has to move about a few miles or scout round a few shops, he might get it at last but not so conveniently as he used to get it from you. This kind of situational inconvenience can happen with regard to any product or service. This transaction between you and the habitual customer of a specific product is just Functional relationship. It is convenience that underlies this seller-buyer relationship. In case it so happens he does not need that product, your presence as a supplier does not influence him or mean anything important. For you also, if the customer moves out somewhere, you do not miss him much nor do you take steps to find out where he is and try to renew the contact.

In our next session, we shall spend some time on some other kinds of seller-buyer relationships.
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