Written by: Acceler8 Business Advisors
Does it seem like some business owners have all the luck when it comes to their suppliers? It always seems like they’ve got a newer, better deal than what they had before. So what’s their secret? It’s all about knowing how to get your suppliers to give you the best value they possibly can—and realizing that value doesn’t always mean money.
Getting the highest value from your suppliers is the fastest and easiest way to reduce the cost of operations. Of course the term “supplier” can mean your vendors, maintenance contractor, or even your landlord. So here’s how you go about getting the best value.
- Look over your supplier arrangements regularly so that you are always on top of what you are paying and what you are receiving for that money.
- Talk to your suppliers about bulk or loyalty discounts or other terms for those arrangements regularly. Often buying larger quantities or signing a longer contract can make a big difference in the price you will receive.
- Consider if you are satisfied with the quality of the goods or services you are receiving from your supplier. If not, then it’s probably time to replace them.
- The way your suppliers manage your account also makes a big difference because if it takes too much effort on your part to get answers to your questions, then you can probably do better.
- Don’t be afraid to choose another supplier if the one you are using won’t let you negotiate to get the terms you need.
- When looking at ways to cut costs, be sure that you aren’t getting lower quality. Reducing the quality of your own goods or services is the fastest way to send your own customers packing.
- Think about whether you could reduce the number of suppliers you currently use. You’re actually spending extra time dealing with multiple vendors, and if one can supply the same goods or services as the other, why not deal with the same supplier for multiple services or goods. Just remember not to put all your eggs in one or two baskets though because you could end up with the opposite problem—no one to supply those needs if those companies suddenly go out of business.
- Look at other benefits than just saving money. Paying less for delivery or being able to extend your payment terms can be a real benefit to you down the road.
- Examine any intangible benefits you are receiving from your supplier, like development work that they are constantly doing to be able to serve you better.
- As your business grows, you may even need to change your suppliers altogether, especially if you intend to diversify your own offerings.
- Look everywhere for suppliers—even if it means taking your business offshore. The marketplace is bigger than it ever was before because now you can go almost anywhere to find a deal.
Just remember that not every business owner will find value in the same places. Improving your bottom line isn’t always about the cash. Sometimes it’s about tools that will make it easier for you to do business or to reach more customers. Spend some time figuring out what the term “more value” means to you. Sometimes getting a lower price won’t mean nearly as much as having an opportunity to double the number of clients you have.
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