For indie retail store owners who run vendor or consignment-style stores, there’s an extra layer of work on top of running a store: managing vendor relationships. 

Vendors at these stores normally rent a specific booth or section of the store to display their products. And while each vendor is in charge of managing their inventory, cleaning their area, and merchandising their products…

…the owner of the store sets the boundaries and guidelines that the vendor must follow. 

Is it possible for retail store owners to set clear, fair, and consistent expectations with ALL of their vendors? Absolutely. Is it an easy task? Definitely not. Managing vendor relationships is no small feat.

vendor relationships

Keep reading to learn why the fine line between friend and colleague can make running a vendor or consignment-style store challenging, as well as my top tips for setting clear boundaries with your vendors. 


For many vendors and consignment store owners who are just starting out, friendship can feel like a top priority. Instead of focusing on being friends with your vendors, though, building a relationship with clear boundaries and open communication should be your goal. 

Vendor Relationships Require Clear Boundaries

When it comes to vendor relationships, boundaries can look like, “Items for your booth have to be dropped off and merchandised between x and x hours,” or, “Texting the store owner between 10p and 6am is not permitted,” or “Booths must be cleared of garbage and dusted x times per month.”

If you’re a vendor store owner and the boundaries I’m sharing don’t jive, don’t laugh—these are just the examples that popped into my head! What matters is that YOU, the store owner, get to determine these for yourself. 

Setting boundaries is MORE than okay. It’s your business, your rules. The vendors get to decide if they want to comply, and if they don’t, you can say that they can’t vend at your store any more. 

This is the moment store owners—especially those who people-please or don’t like confrontation!—cringe.

vendor relationships

I get it, you don’t want to be the “bad guy/gal.” But the result of NOT being willing to set boundaries is that you don’t establish rules, you certainly don’t enforce anything, and you definitely don’t want to have a conversation with your vendors about any issues that come up.

You just want to make everyone happy, right? But that leads to you not making YOURSELF happy. Without those boundaries, you feel taken advantage of. Everyone is getting what they want except you. And that is a one-way ticket to vendor/consignment store owner burnout.

For many retail store owners, our default setting is people-pleasing and wanting everyone to be our friend. While I didn’t have vendors in the store I previously co-owned, I know what people-pleasing syndrome looks like. And I often see it in consignment and vendor store owners. 

On top of that default people-pleasing, our brains always want to keep us comfortable—and that often means avoiding conflict altogether. But “comfortable” doesn’t always get us the results we’re looking for, especially in business. 

If setting boundaries doesn’t come naturally to you (or you didn’t realize that a lack of boundaries was the problem until now!), let’s work on building your boundary-setting muscle. 

I promise you, you’re going to be so much happier as a business owner when you learn to set boundaries—even if doing so is inherently uncomfortable. 

How to Effectively Manage Vendor Relationships

So, what kinds of boundaries should you be setting for your vendor relationships? Here are a few that I believe all consignment and vendor store owners should implement. 

Create a Clear Booth Rental Agreement

You need to have a clear and comprehensive booth rental agreement that outline the terms and conditions of your vendor-store owner relationship. This should include rental fees, duration, and any booth, display, or product expectations. 

It’s particularly important to clearly communicate any rules regarding product display, pricing, and promotion within the booths.

Communicate With Your Vendors Regularly

Maintain open and transparent communication with vendors. Keep them informed about any changes in policies, events, or promotions.

Establish a communication channel for your vendor relationships. This could be an email newsletter, meetings, or even a Facebook group. Choose what works best for you, as every store owner has their own preference on how to best communicate with their vendors. 

vendor relationships

Establish Accountability and Consequences

In your booth rental agreement, you need to outline what the consequences are for not following the rules. You have to establish ways to hold your vendors accountable, even if it makes you uncomfortable. 

Additionally, make sure that your boundaries and the consequences for not respecting them are 1) clearly stated in the rental agreement in case of disputes and 2) the same for EVERYONE. 

If you have a previous friendship with a vendor, it’s crucial that you treat them the same as you treat other vendors. You’ll avoid lots of unnecessary drama by holding everyone to the same expectations.

Provide Support and Resources

Offer support to vendors, especially new ones, by providing guidance on merchandising, product placement, and booth design.

You can also make resources to help your vendors succeed. These can include information on customer demographics, market trends, and marketing materials that vendors can use to enhance their booths or help you market your business as a whole.

Schedule Regular Vendor Meetings

Having regular vendor meetings gives you and your vendors the opportunity to discuss any concerns, address feedback, and foster a sense of community.

Use these meetings to collaboratively plan events, promotions, and strategies to drive foot traffic to the retail store.

Ask for Feedback

Have a way to gather input from vendors regarding their experience in the retail store. 

That way, you can quickly act on constructive feedback and address any issues promptly. Doing so will help you maintain strong, positive vendor relationships.

Organize Promotional Events

Your vendors’ success contributes to your success! Organizing a promotional event with a joint marketing effort can attract more customers to your store and help make more sales for everyone.  

Listen and Be Flexible

Whenever possible, try to accomodate vendors’ needs and requests (as long as they’re reasonable). Doing so builds trust and loyalty.

Listen when your vendors speak up, especially if they ask you to change policies or make improvements. Their feedback is valuable.

vendor relationships

Establish Fair and Transparent Practices

You can avoid a LOT of drama by ensuring fairness in your booth assignments, pricing policies, and other business practices. 

Fairness in your vendor relationships requires holding everyone to the same standards, regardless of booth size, sales, or other factors.

Be Prepared to Resolve Conflicts

You need to have a clear process for resolving conflicts or disputes between vendors. You should also be prepared to mediate when necessary.

Additionally, be ready to address any issues promptly. Doing so can prevent them from escalating and affecting the overall atmosphere of your store.

Provide Networking Opportunities

Hosting vendor mixers or other events for your vendors not only improves your vendor relationships, but their relationships with other vendors, too! 

These sorts of events encourage connection, collaboration, and can even lead to mutually-beneficial partnerships between vendors. 

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High-Quality Vendor Relationships Will Make Your Business More Successful

By setting boundaries, ensuring fairness, and providing the support your vendors need, you’ll create positive vendor relationships. When your vendors feel supported, they’ll be more successful—and ultimately contribute to the success of your business. 

I know if can be difficult to maintain vendor relationships as business relationships. Business relationships can still be friendly, though! 

The boundaries you establish will empower you to hold your vendors accountable and take necessary action, regardless of how friendly you are with each other. Sometimes that may mean terminating your agreement when rules aren’t followed or criteria aren’t met—and that is more than okay. 

Remember, vendors are small business owners, too. Whether they view themselves as such is up to them. By having boundaries and consequences for not following the rules you both agree to, you’re becoming a better business owner and helping them do the same. 

When we talked about vendor relationships in Master Shopkeepers, I loved what one member said about having boundaries and being friends with their vendors: “From my experience, some professional distance is good. But inevitably, the vendors who are really good and respect your boundaries evolve into friends.”

Resources

Timestamps

  • [02:49] Vendor Relationships Require Clear Boundaries
  • [08:33] How to Effectively Manage Vendor Relationships
  • [19:31] High-Quality Vendor Relationships Will Make Your Business More Successful

Connect With Kathy

Kathy Cruz is an Independent Retail Coach who helps store owners work smarter, profit more, and grow their brick and mortar businesses. 

Connect with Kathy and learn more here:

Website: www.savvyshopkeeper.com 
Instagram: @savvyshopkeeper
Mastermind Group: Master Shopkeepers

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