Several years ago, I actually looked at one of our homeowner\u2019s insurance bills and found our provider increased our rates significantly beyond our initial rate.\u00a0 So, I went out and found better coverage and a much better rate with an alternate provider.<\/p>\n
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Then, the other day, my new homeowner\u2019s insurance bill arrived in the mail.\u00a0 \u201cUgh\u201d, I thought, another envelope I\u2019ll let my wife take care of.\u00a0 Then, I heard her ask me if I was interested in taking a look at it.<\/p>\n
With a lack of enthusiasm and sincerity, I said, \u201csure, why not\u201d.\u00a0 To my shock and horror, the bottom line struck me like a kick to the gut\u2026a whopping 40% increase!\u00a0 For once, I was actually glad to get a paper cut!<\/p>\n
In less than an hour, I had a new homeowner\u2019s policy through another provider that was 20% less than my previous year\u2019s rate. Celebrating my victory I added the savings to our vacation money jar!<\/p>\n
So the question I have for you is simply, \u201cwhen is the last time you looked at what your suppliers are charging you for goods and services that are typically overlooked\u201d? \u00a0If you had difficulty answering this question, you are making a common procurement mistake.<\/p>\n
Think about it, even if you are utilizing many of the procurement best practices and are taking the time strategically negotiating large deals, there are goods and services purchased that are potentially falling under the radar.<\/p>\n
Andrew, your long-forgotten supplier, certainly\u00a0isn\u2019t\u00a0going to call and say, \u201cJacob,\u00a0you are spending 15% more for paper supplies than you have to, let me offer you better pricing\u201d!\u00a0 Andrew is glad to never hear from you and may even try to slip in additional price increases without your knowledge.\u00a0 Jacob, it is time to go to battle with Andrew!<\/p>\n
Now, it\u00a0doesn\u2019t\u00a0have to be a battle of cinematic proportions, rather, it can be a \u201cwin-win\u201d for both organizations!<\/p>\n
Remember, the last number a supplier wants to see showing up on his or her phone is from a buyer who buys in large quantities, pays their bills on time and never asks any questions.<\/p>\n
Before contacting your supplier, make sure you are well-prepared with a list of open-ended questions to ask your supplier regarding terms, pricing and possible solutions that are satisfactory to both parties.<\/p>\n
For example, asking a question like, \u201ccan you do better on the price of paper supplies?\u201d, can easily be dismissed with a simple \u201cno\u201d.<\/p>\n
Whereas, saying, \u201cAndrew, we have had a great relationship with FineView Industries for years, but I recently noticed that the price of paper products is much, much higher than your competitors, what can you do to help us both out?\u201d<\/p>\n
In this scenario, you are asking an open-ended question that requires a thoughtful answer.\u00a0 You are subtly implying that even though you like FineView Industries, you are very much aware of their competitors without making a direct threat to take your business elsewhere.\u00a0 Also, by positioning the question with the wording \u201chelp us both out\u201d, you are letting the supplier know you are willing to achieve a \u201cwin-win\u201d result.<\/p>\n
Of course, you will want to utilize your contract-writing skills as well, making sure you have the newly agreed upon terms in writing.\u00a0 Just make sure your supplier\u00a0isn\u2019t\u00a0hiding any pricing or terms behind fancy jargon. \u00a0That would be another procurement mistake.<\/p>\n
Once you have hashed out the details and negotiated agreeable terms, make sure to let your supplier know you will keep in touch.\u00a0 This is a good way to keep your supplier relationship strong and helps to keep you as a top of mind buyer for your supplier.<\/p>\n","protected":false},"excerpt":{"rendered":"
Several years ago, I actually looked at one of our […]<\/p>\n","protected":false},"author":12,"featured_media":4035,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-3348","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-procurement"],"yoast_head":"\n