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Business relationships can be between employer and employee, company and customers, suppliers, competitors, or shareholders. They can be transactional or long-term. Employers and employees have a mutual agreement, while contractors are not employees and have different responsibilities. Companies build relationships with customers through loyalty programs and communication. Companies also establish relationships with each other, such as retailers relying on drop shipping vendors.
Business relationships occur whenever there is some kind of partnership formed between two business parties. These relationships can be between employer and employee, a company and its customers, a company and its suppliers, a company and its competitors, or a company and its shareholders. Some of these relationships are transactional in nature, but they are usually established and somewhat long-term.
One type of business relationship is the relationship between an employer and its employees. This is a union that is normally initiated by both the employer and the employee through the recruitment process. Each party agrees to enter into an employment relationship in which the employer provides a wage and benefits in exchange for work. The employee acts as a representative of the employer and seeks to implement its goals and objectives.
Business relationships can also be established between companies and independent contractors. In this type of relationship, the contractor is not considered an employee of the company, but performs a service or function that the company needs. The main difference between this type of employment relationship and the employer-employee relationship is that the contractor is responsible for paying his own taxes, generally does not receive health and insurance benefits, and is free to take on other work projects from competitors.
Another common type of business relationship is the relationship between a company and its customers. In the consumer market, this relationship can be subject to volatility, as some consumers are not brand loyal and will change their purchasing behavior based on price or convenience. However, there are some customers who become quite loyal to a particular brand, store or company and rarely deviate from their regular shopping habits. Direct marketing and mail-order companies capitalize on the concept of building customer relationships through regular communication, personalization, and reward systems.
Companies often establish business relationships with each other. For example, retailers rely on drop shipping vendors to store and manage their inventory on certain food items such as branded bread, crisps and crackers. Supplier representatives partner with local store decision makers to maximize product sales to benefit both parties. The supplier not only provides the retailer with the premium product that its consumers demand, but also performs all of the work associated with stocking the retailer’s shelves and display equipment dedicated to the product line. In return, the retailer may agree to certain space allocations, promotional displays and excess stock storage.
Asset Smart.
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