Cutting purchasing costs doesn’t have to be difficult. Here are five approaches to purchasing your firm should consider.
1. Join other offices and take advantage of group discounts.
Because the group represents a lot of business, the group can tell a vendor it will use it exclusively in exchange for an overall, sizeable discount. The group can also get individual discounts on large orders.
One approach with this type of arrangement is to let one manager in the group run purchasing for a year and then pass the job along to another manager.
2. Ask each vendor for a prompt payment discount.
Some vendors will give a discount for paying within a specified short period of time.
3. Get staff involved in the purchasing process.
One manager divided staff into groups and made each one responsible for the costs in one area such as office supplies and client area supplies. The manager told staff that the office had to cut costs and didn’t want the cuts to come from salaries, so the groups had a strong incentive to get the best prices. They don’t hesitate to tell a vendor, “We need to save money here or we’ll have to go elsewhere.” At every staff meeting, they report on their results and discuss ways to cut costs even further.
4. When purchasing equipment, look past the price tag.
Just as important as the equipment are the supplies and labor required. For example, one copier might require toner that costs $75 while a less expensive copier needs $250 toner.
5. Check equipment contracts, too.
Don’t accept a provision that the office has to get supplies or service from the vendor. Tell the company the office will buy the equipment only if it can use other suppliers.
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