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Conflict Resolution in Vendor Management

By University Alliance
Conflict Resolution in Vendor Management

The key skills necessary for a successful vendor manager extend beyond the usual understanding of finance and accounting into more subtle but equally essential knowledge, including conflict resolution and negotiations. Sourcing a vendor is costly in both time and money. Anticipating and then skillfully mitigating conflict when it occasionally arises with a valued vendor not only protects reputations but also saves resources and salvages the relationship for continued prosperity for both parties.

Within the vendor management team, a formally trained and highly skilled negotiator is invaluable to help maintain, anticipate, and alleviate conflict. Even before any conflict arises it is important to have a plan in place that includes:

Taking Initiative to Build Rapport

When a vendor manager takes the time to build rapport with individual vendors and use ongoing communication to check the pulse of the relationship, then some problems can be anticipated and dealt with before they evolve into a situation at all. When both parties are invested in maintaining strong alliance and rapport, then solutions are more easily attained. Remembering to acknowledge the worth of the vendor’s product and services can help build a relationship of trust and loyalty over time. Recommending the vendor when appropriate and sending holiday or other yearly acknowledgements are ways to be sure your working relationship is built on a strong foundation of mutual respect.

Emphasizing on the “Win/Win”

A strong working relationship cultivates an environment where matters of difference can result in equitable solutions that can protect the company’s interest. This relationship can also move the vendor into conflict resolution through incentives and other additional compensate that preserves the vendor-client relationship. Just like raising kids where what is fair isn’t always what is perfectly equal, so it is in vendor negotiations where the best solution isn’t always a 50/50 split among the difference.

Having a detailed plan worked out ahead of time that communicates conflict resolution goals to the entire team can underscore the importance of clear communication along the way. Having a plan in place also lets a vendor know that you are prepared for difficulties should they arise and have a process to handle differences in a professional and non litigious way. With an emphasis on the “win/win” aspect of negotiations and the protocol in place to handle conflict as soon as it arises, vendors and clients experience a smoother ride all around.

Know Your Boundaries

At some point in your personal or professional life, someone has made a promise that they just couldn’t, or worse yet, could but wouldn’t keep. In this age of instant judgment via posting reviews using online social media tools, it is vital that representatives know what they can and cannot provide or deliver. Poor communication and empty promises are two ways to slash a strong reputation faster than you can back track and change the outcome.

Any relationship involves understanding needs, expectations, and the inherent power dynamic that balances between the two. Strong negotiators know when to respond to requests completely, negotiate further, or escalate the conversation to bring in more powerful allies depending on the severity of the conflict and the desired outcome of the resolution.


Most managers are, by nature and training, somewhat skilled at negotiating. Vendor managers, however, need to be sure sharp negotiating skills are kept fresh and responsive especially in a challenging economy which has everyone re-examining corporate bottom lines. Taking time to revitalize your negotiation skills through formal online or other training, attending a professional conference in your field, and regularly visiting the resources found on the websites of professional associations are a few ways to stay ahead of your competition.

Vendors, especially those working on commission, often aggressively seek sales and negotiation courses to out shine competitors. As a vendor manager, your negotiation skills are just as important. A highly effective vendor manager brings competence and confidence to the table and can be an invaluable resource for the company in good times and in bad.

See Frequently Asked Questions for online requirements, accreditation, class schedule and more.


Request More Info On Negotiation Courses

The initial course of three that I am taking has helped tremendously in my company’s daily operations. As a professional already involved in multiple negotiations that leverage everything from people, material costs and logistics to method of application and incremental value assessments, I’ve found the first eight-week course alone has refined my abilities and is well worth the investment. Professor Paulson's in-depth course guidance and participation especially made this worthwhile. I look forward to continuing on with the next of three!

Stephen P. Smith, IV
Colton, CA

Category: Negotiations