rVibe LogoIn my view of things, there are two types of external relationships you can have in a company - a vendor or a partner. And it’s not always clear which is which.

My definition: A vendor is a person or company that provides a specific service at a specific cost with expected deliverables. A partner is a person or company that has a mutually beneficial relationship where both parties absorb some of the cost and both have something to gain. I generally prefer partnerships and actively seek them in every relationship we have. It shouldn’t come as a shock to me, but it always does - how often companies just are not willing, or able (and that is often the case) to engage in a partnership. They just don’t have the framework or infrastructure to support a partnership. Amazing. But vendors can be good too. You can drive vendors and can cut costs out of vendors. I don’t particularly enjoy doing either and it feels a bit slimy to me - but it can be highly cost effective to use a vendor and drive them to their promises. You just cant’t be scared to push hard, and ultimately it’s better for everyone if you do. For partnerships there is a cost factor as well - if you do it right. Squeeze out some of our cost by adding risk back to the vendor for greater payoff in the future, or by adding some other value back to the vendor. Companies with an entrepreneurial spirit will actively engage in partnership - they are less risk averse (for so many reasons) and seek value in addition to cost savings. We have over 10 vendors or partners (not including your normal utilities, insurance, etc) that we work with and all told I think we’ve saved around 70% off of expected costs by building strong partnership relationships and by hard vendor management.

Originally published on WordPress on April 05, 2007. Migrated to this blog on May 29, 2025.