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.
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.