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5 Ways to save money without calling us ... a tongue in cheek look

 

1.The Head Basher

You suspect that your supplier has been quietly sneaking prices up and you are paying more than the contract states or a least premium rates for their product or service.
Employ or dedicate someone to solving the problem. Get 3 quotes on every job going forward and play one supplier off against the other.
 
Works like a bomb if you have the time, energy and inclination and recourses to horse trade!

The downside maybe that the additional costs and time it takes to get the cheapest price will increase total costs or commercial risks.
 


2.The Blind Side

You decide reviewing agreements, supplier performance and contract management is not your ‘thing’ or perhaps its not part of the core business capabilities and its best left to the ‘professionals’.
You engage with an expert in contract management or supplier risk and performance to mange that process on your behalf.
 
A great way to reduce risk, save time, energy and money

Downside, you may end up feeling out of touch with what you want to achieve, or think you could have done it better yourself because after all you know everything and it’s your business. You ‘trust’ the seller because they came highly recommended or you have done business with them on and off for 20 years, you know in your heart-of-hearts that they would NEVER EVER let you down. Right?
It’s your money, your budget, your risk to take – choose wisely who gets to spend it and consider how well you identify, measure and document the risks that could impact on the achievements of your business objective or the hidden costs of underperforming supplier engagements or terms in the agreement that you didn’t think ‘applied to you’ or somehow perhaps they ‘miraculously appeared’ at some later date.
 


3.The Fault Finder

You feel that you are paying too much for something but have neither the time nor the energy to shop around.
After each delivery simply find a fault and insist on a discount!
 
It takes a keen eye, a thick skin and a cold heart but it will reduce costs in the short term.

Downside is fairly obvious; the amount of time spent fighting with your supplier could probably have been better spent on growing your business.
 
Suppliers are no fools, they generally get tired of this game and either price your quotes up to give you a discount or just stop dealing with you.
 


4.The Slippery Slope

You want to be rewarded for the money you intend spending. You feel that your purchasing power deserves a volume discount.
Your suppliers will usually offer you a future discount for volume or a sliding scale rebate. You spend first then get the benefit of the discount.

Makes good business sense - in theory.

In practice we have very rarely seen sliding scale rebate or volume discounting systems that work in the long term for either the client or the supplier.
In reality they are, at best a saving account, with contributions coming from the premiums you are paying on each job over a period of time – reach your spend target and you get your money back or don’t reach your target and the supplier pockets the accrued cash.
In most cases we have come across these systems are far too complex. They take a very long time to set up, and are not usually administered properly and cost more than they are worth.
 


5.The Terminator

Costs have spiralled out of control; your warehouse is littered with unused and obsolete products. Belts need to be tightened. You simply cut the budget.

The most effective way to reduce cost is to spend less.

Downside; your cost cutting may have unintended consequences on your market share, business sales, staff moral and therefore business revenue. Trim wisely. Managing supplier performance is often the most costs effective long term way to reduce your outsource or overhead spending as well the added benefits of identifying possible risks and being able to proactively monitor it and do something about it before it’s too late.