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third party "vendor approval"

third party "vendor approval"

third party "vendor approval"

I recieved a call from a customer asking if I could perform same work I did for them when I was an employee of another company a few years back.  (I am now a single person corperation).

I really liked the though I was asked and forwarded them rate sheet, however, I was informed a third party company would be in contact to discuss becoming an approved vendor.

When contacted by this third party company, the only thing they would discuss was payment of a $700 fee.  with out payment, they would not discuss the application requirements or process.  

BTW, the "fee" is only good for one year and customer does not reimberse.  and from what little I manange from this initial contact, there would be additional expenses ($200) and non reimbersed time (~15 hours Computer based training)

I really like working for this customer, but though the ideal of paying was offensive (I could easily absorb it as about 7% of expected billing).  Am I wrong in my feelings and would others pay to become an approved vendor?

RE: third party "vendor approval"

We have gone through several "approved vendor" processes and I can't remember ever paying a fee.  At most some municipalities might charge a $40 fee for paperwork or something but nothing of the scale you are talking about.  I have heard of would-be vendors having to pay the cost of an auditor to give them an inspection on behalf of a potential client but never just a fee for "registration".

I'd vote "pass" unless some really good reasons are given from the client as to why this middleman service is required.  One such reason that I *might* find valid would be if this $700 fee would allow you to be an approved vendor for other companies this middleman represents.

Certainly seems odd to me, but I don't claim to have the sum total of experience in business either. :)


RE: third party "vendor approval"

That sounds strange to me. I've gone thru a couple of "approved vendor" processes also and not a single penny in fees. Talk directly to the customer and find out more info.

Also, just because you're on an approved vendor's list doesn't mean that you'll get automatic business from the company. You're just on their list, competing with many other providers.     

RE: third party "vendor approval"

This can't be anything good - I don't think

RE: third party "vendor approval"

I was thinking that since I started out on my own, all of my customers have gone out of there way to get me approved and on site working.   with this call, I guess I was expecting the same from them and when I got the shock of some one insisting i provide a credit card number I didn't know if this was real world and I have been living in my fantisy.

I did not pay and have informed the customer's rep I would not be available, but I didn't think telling them how insulting I though this was a wise thing to do.

I guess I'll never know, If I had made a deal of it, would they have paid it

RE: third party "vendor approval"

I guess this is an industry-specific thing.  In Oil & Gas it is common to "contract through" another company.  For example a large number of the engineers that KBR puts in Oil & Gas Company offices are contractors that send their invoices to KBR, who adds a "small" percentage and forwards it to the company.  The individual engineers are not set up in the company's database as approved vendors.

KBR's approach is pretty common for engineers, and I haven't heard of any engineers having to pay to work through them (except for the percentage that KBR takes off the top which is a bunch more than $700).

For folks like welders, rig consultants, and specialty suppliers there are other aggregators that always charge some sort of "membership fee".  Mostly these guys are bottom feeding scum that you would never use if you had the wherewithal to get set up yourself.  I have a client that pointed me towards one of these bottom feeders to save him the time required to have me established as a vendor.  When I heard the fees and (what amounted to) kickbacks I passed.  I knew the Supply Chain Management guy and called him directly, he said he could get me set up as a vendor in 15 minutes and sent me the forms.  I completed the forms and sent them to my production contact who forwarded them to Supply Chain and I was set up the same day.

It sounds like the $700 deal was just someone trying to avoid a bit of administrative work.


RE: third party "vendor approval"

I'm in electric generation maintenance.  the website for the 3rd party company seems to be geared to the mining industry with growing buisness in utilities.

RE: third party "vendor approval"

i ran across this situation when i first went independent.  the customer used a third party to perform all paperwork and background busines financials, including insurance checks.

i had no problem with it while i just added the expense into my billing. i did wait until i had a start date before paying the fee and when the yearly renewal came up i declined because there was no outlook for work with the customer.

this was for electric generation outage work.


RE: third party "vendor approval"

Well, wouldn't you know it, just yesterday I got a call from a client, been bought up by a large pharma, and to do any more consulting for them, I need to sign up with their outsourced vendor approval firm.

There will be a fee-he thought maybe $250.  Both the client and I know I'll just increase my estimate to cover the cost.  So silly...

RE: third party "vendor approval"

I spoke bluntly with the vendor approval company today to informed them I would not be applying.  He and I spoke very bluntly about having to pay to play.  he started out with a canned response of how it keeps things equal among bidders, but closed with he understood my point and would pass it along as reason for not appling.

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