Are Gifts from Vendors Acceptable?
Is it okay to receive gifts from vendors? Is it ethical? Does a gift from a vendor come with strings attached - to find favors with the purchase managers? Are ‘gifts’ and ‘bribe’ synonyms in business?
Are you in the purchase and procurement team in your company and come Christmas, or other such times for celebration, do vendors and suppliers send over gifts? Do you wonder what is the right thing to do? By not accepting are you being rude?
Chillibreeze and its Vendors – What the Relationship is Like
I can relate to these questions, having steered the administrative division of Chillibreeze for over a decade now, I have handled vendors too. Let me share with you the inside story about the unwritten rules Chillibreeze follows when doing business with its vendors.
In a product manufacturing company, a lot depends on high-quality raw material, that too delivered without delays, so that the end product can meet the expectations of its customers. Therefore, good systems and practices for raw material purchases are imperative if a product manufacturing business must succeed. A direct implication is that the company selects the most suitable suppliers/vendors and maintains a good relationship with them.
Chillibreeze is not a manufacturing company but a design service provider. So, the suppliers’ material does not go into the ‘product’ we deliver to our customers, but they oil the engine which produces the output – be it computer systems, broadband services, furniture, water tanks, material for office maintenance and upgradation etc. Other than the core business of Chillibreeze, we also run different business units and spin-offs like Zizira, Muezart, The Village, The Farm, and the turmeric processing center in Saphai, etc. As a result, we deal with vendors for many items, like:
- Electrical items like wires, inverters, casing, plugs points, fans, heaters, lights
- Wood suppliers
- Hardware like paints, adhesive, roofs, screws, cement, sand, stones, steel rods, bathroom fittings, etc
- Water tank and septic tank
- Carpets, curtains, doormats, etc
I have found that it is important to maintain a professional and trusting relationship with our vendors/suppliers.
Heart to Heart – Inside Stories About Vendors
Let me start by answering a question that must be uppermost in your mind.
In India, it is common to hear about ‘deals’ in purchasing. What has been the experience in Chillibreeze?
It is humbling to see that we were able to build Chillibreeze brick by brick without having to resort to any unethical behavior. Was it hard? It was challenging but not impossible. The lightness of heart that comes by doing the morally right thing gave us the capacity to succeed.
Chillibreeze believes in clean and honest business practices. When I was dealing directly with all the vendors, banks, insurance providers, and other establishments, I had made my expectations clear – that we look for good quality material or service, on time, at a fair price, and that we would pay them on time as well. Yes, Chillibreeze never delays payment – at times vendors are surprised with the speed with which we clear our bills.
But, yes, deals are so common that vendors think every company they deliver to wants a cut too. Here are two real-life experiences of Pynshailang Lanong, a staff in the purchasing department of our group.
When we decided to purchase a large piece of equipment, we zeroed in on a vendor. The price was around Rs. 6 lakhs and we told him that we will transfer the payment through NEFT. Guess what?
He said, before you transfer let’s discuss how much commission you wanted to take
I led him along and intentionally asked how much I can get. The vendor quoted a percentage.
I told him to give that percentage as a discount for the company. The vendor could not believe what I said. 😊 He was surprised and praised me. I told him that Chillibreeze strongly believes in a good work ethic and we put integrity as one of our values. I told him that my responsibility is to look after the infrastructure and purchasing necessary things and for this, I am rewarded every month with a good salary.” Pyns has many more stories like this to share.
Another story that Pyns shared –
There are two vendors who print Chillibreeze T-shirts and Calendars. I had the same experience with them too – being offered a commission. In their world this was normal. They thought by doing this we will help them get more orders from Chillibreeze. But they soon understood our work ethics. And they know now that we have set a high bar for them - to get us good quality work, else we will look for another vendor.
Vendors Love Chillibreeze
Over the years Chillibreeze started getting noticed for its ‘straight’ policies and we now have a reputation to keep!😊 That we are a good company to do business with.
I can even say that vendors and establishments love us as they learn a lot from us too as the products and services that we require are different and our expectations are high. Often, we learn from them too.
Here are a few examples where the vendors and service providers learned something new thanks to working with Chillibreeze.
- In the early days of our company, we needed bank guarantees for our credit cards, something the local branch had never handled. They learned the process by getting it done for us.
- As part of our requirements for Zizira and Muezart, we set up temporary wooden sheds that are easy to assemble and take apart. Wood vendors who provide us with the pieces learned a lot from the design and it makes it that much easier for us.
(Dismantlable wooden sheds we use for our field projects. Suppliers of wood for this project learned the design and now help us innovate.)
- Our requirement for BBQ on wheels and our Pizza oven on wheels too was new and our vendors ended up with skills to make something that could have a bigger market.
We Learn From Our Vendors Too
Often, we benefit from the suggestions of vendors – in the area of construction, machinery, etc.
While writing this blog I felt feedback from a vendor would help and here it is:
Chillibreeze Says No to Gifts
We would never accept gifts or anything from vendors and other establishments, nor give ‘gifts’ in exchange for favors. We have had times when people would go out of their way to help or guide us, and we would give them our T-shirts or sometimes Zizira products.
Let me share some interesting experiences about this.
- There was a time when we went for campus recruitment and all of us were given a small alarm clock. We refused to accept it. But the owner of the Institute insisted. We kept those alarm clocks and used them in the office.
- There have been instances where tea stall owners, where we eat lunch, have said that they do not want to take money from me as they recognized me as being from Chillibreeze and their son or daughter would be trying to get hired by Chillibreeze. I would gently refuse to accept food without paying for it. They no longer make me this offer.
- Chillibreeze has a policy of dropping staff home when they stay late, and we use taxis for the same. Once I had to use one of those taxis on a Sunday for a personal trip and the driver said he would not charge me. I explained to him that this is not how we work and paid him. These moments are special – as their reaction is always one of surprise and disbelief. After having been around for 15 years now, almost everyone knows that Chillibreeze’ s is different and is driven by principles.
In recent years, we have had vendors gifting us cakes during Christmas and sweets during Diwali. I am recommending that Chillibreeze considers a blanket ban on gifts and other things from vendors as that would be the right thing to do. There will be no room for any confusion.
Our Expectations From Vendors are High
We hold our vendors accountable.
Our vendors are crucial for the smooth functioning of our company. I strongly believe that it is our responsibility to evaluate our vendors from time to time, and for us to have high expectations so that our operations are smooth. We have had cases where vendors became complacent over a certain period and we challenged them and held them accountable to what they had committed to. If they are not able to meet our expectations, we part ways with them, in a professional manner. No acrimony. We find another vendor.
This post is not about boasting about ourselves. My objective in talking about this was to share my experiences and to show that it is entirely up to a company how they want to deal with vendors. But I know from experience that for a company to thrive, a healthy, professional, and mutually respectful relationship with vendors is an absolute must.
Hope you found this post useful. Maybe you have such stories to share too – about your relationship with your vendors? Do write and tell us.