According to an Entrepreneur article, having too many vendors can be overwhelming, inefficient, and lead to higher administrative costs. Having closer relationships with a few choice vendors allows for both parties to work together to control costs, and eliminating "troublesome vendors can quickly increase the efficiency of your purchasing and administrative staffs." If you feel as though you have too many vendors but aren't sure which ones to eliminate, start by evaluating the performance of each. Take into account factors such as unreliability and lateness of delivery, higher costs, and insularity or unwillingness to communicate. Your SRM and SCM software can also help you evaluate supplier performance and make your decision.
This simple and most basic rule is also perhaps the most important. Invite your suppliers to your strategy meetings, let them tour your office, include them in business events and parties, and share information about new products and personnel. Likewise, you should be able to visit your suppliers' offices and know the ins and outs of their business. Personalizing the relationship like this and getting to know one another creates a solid partnership. It's also important to be honest and upfront with your suppliers about your needs so they can perform better and know what areas to improve in to keep you happy.
Effective supplier relationship management is the best way to ensure optimal supplier performance and help you run your small business more efficiently. Investing in high-quality software is a start, but actively taking the above steps will build even better relationships.