Spend time evaluating what you pay your suppliers.
It’s not just customers that earn you money into your business and keep things ticking over. You can earn money by spending some time evaluating what you spend with your material suppliers, to save money and you might get a surprise at what you can save at the end of the month.
In business, it’s a dog-eat-dog world and not only do you need to keep in mind your competition as well as your customers, but you also need to keep in mind your suppliers.
If you are spending money with a supplier on a regular basis, there is no doubt that it will be a lot of money, so you should expect to get the best possible discounts available for your business.
Unfortunately, in most circumstances this isn’t the case.
You might think that the discount you are getting is great, you probably consider it as a bonus because you can charge the customer the full amount for the materials and earn some money this way, or even pass a discount on to seal a deal (which helps as a start-up business to keep costs lower).
But the best thing you can do is to shop around, as what you might think is a good discount, might not actually be a great discount. It might also not be a great discount across the board of all materials that you buy. One supplier will do some materials cheaper than other suppliers but they won’t be cheaper on all of them.
Best thing to do, create a spreadsheet and write down the name of the material, maybe a part number, then enter all of the suppliers that you know of, find out what they charge for each and compare. As time goes past you just need to ask how much a supplier is charging for a particular product and if you notice that the price has gone up, then adjust the spreadsheet.
Trust me on this one, it really will earn you money.
Play the suppliers off each other, they are out to make the most money that they can, and so should you. There isn’t a lot of loyalty in business so don’t fully commit to a supplier because you think that you’re getting a good deal, go and explore the market.
At one point, we were buying all of our supplies from the one company because we thought we were getting the best possible deal, but as time went on and different suppliers approached us to try and win some of our business, they noticed that on a lot of products we were buying, that they could do them cheaper.
When you add up all of the small profits together, it becomes a large profit at the end of the month.
As I say time and time again, small profit plus small profit = large profit.
Ask yourself this, if you are ordering all of your supplies from one company, do they call often to find out how things are? Do they offer to discount materials that you order most often?
Don’t let the suppliers get comfortable, they will be happy taking your money if they know that you don’t shop around the market.
Make them aware that one company is doing something cheaper and see if they can come up with something better.
This may sound obvious but it’s amazing what extra that you might save when you are getting materials discounted already.
@sheeshkababage