What are the pros and cons associated with developing close ties with your suppliers and logistics providers?

Question

What are the pros and cons associated with developing close ties with your suppliers and logistics providers?

Answer 1

How close? As long as it is maintained as a business relationship and nothing personal. Once it becomes personal, and you gain extra benefits from the partnership, depending on the companies, there might be a case of conflict of interest which can have lawsuits attached for unfair advantage...

Having closer business ties like signing contracts for longer years to get cheaper price is all in good faith and works. It is always good to have good standing with suppliers as they will be able to provide relatively negotatiable competitive rates.

Cons could be if you have already signed a contract to be supplied by them for a few years, there are loopholes in contract that does not cover bad components or you find a better price from another company but cannot break this contract. Or fixed price set by the contract and somehow the market price falls but you cannot get a new price...

Anyway I might be running off in a tangent into more about pros and cons about contracts... =)