- Select your suppliers carefully
Research thoroughly to find reliable suppliers that offer high-quality products at affordable prices. Don’t always focus on price. When selecting suppliers, consider factors like reputation, experience in the industry, product quality and delivery time.
Consider the opinion of your employees who work directly with the products or services that your suppliers provide. These people will be able to provide valuable insights into what kind of supplier works best for your business. For hiring buyers, consider a procurement recruitment agency like https://talentdrive.co.uk/
Your business can reap long-term rewards if you treat your suppliers with fairness and consideration. A culture of mutual trust and open communication can lead to preferential treatment and better deals.
By regularly reviewing and evaluating the performance and credentials of your suppliers in a transparent manner, you can ensure that they are meeting your expectations. This also gives them an opportunity to grow with your business.
- Negotiation is a skill
Negotiation with suppliers can be tricky. Negotiation isn’t just about getting your supplier to lower their price. It is not always in your best interest to get your supplier to agree to a deal which is not profitable for them.
If a supplier loses money, they are more likely to deliver less or even go out of business. Negotiate on the price but also volume discounts, payment schedules, and contract length.
To avoid confusion and disputes, clearly define the terms and conditions of supplier contracts. Review and update contracts regularly as necessary.
- Bulk buying and consolidation
You should buy in bulk whenever possible to benefit from volume discounts and to reduce shipping costs. Consolidating orders is one way to achieve this. It will streamline the procurement process, reduce paperwork and save time for your finance team.
Consider forming a collective buying group to improve your bargaining position with larger suppliers.
- Maximising your purchasing options
Putting all your eggs into one basket may not make sense. If one of your suppliers is unable to fulfil an order, you will have other options for obtaining supplies.
A list of suppliers that are similar can help you benchmark the cost of your purchases and encourage suppliers to offer competitive products and services.
Consider diversifying your supply chain. Consider working with diverse suppliers including small businesses, minority-owned companies and other sources of diversity. It can be a great way to drive innovation and get better prices from companies with lower overheads.
