Survey

In spite of high inflation some cost savings were obtained. How much net cost changes in the last 6-12 months did you obtain over or under the budget?

More than 10% under.
1 to 10% under.
No change.
1% to 5% over,
6% or more over.

Don't Wait For A Better Offer

Date: 06/01/2016

Most purchasing professionals wait to receive a bid or a better offer for items they are already buying. Unless there is a time limit on an RFQ or RFP, they have a very long wait. It is infrequent for companies to suddenly come in with a lower price or better terms. It only happens if there is a change in the market or the competition is taking away their business with other customers and the suppliers don’t want you to get an offer you can’t refuse from one of those other competitors.

Well before you are ready to place your next order, surprise your supplier. Tell him that you will give him a new order if he can accept the following terms. Then give the supplier a new lower price or the new better terms you would like. By doing this a long time before you are ready to place your order, you give the supplier enough time to check his cost and determine if he can do what you ask and still make a good profit.

An alternate approach would be to ask for an immediate decision. This may be appropriate if you know, or think you know, that the supplier has plenty of room to reduce his price or agree to your offer of better terms.

Don’t worry if the supplier won’t budge. You can still place the order with the old terms, and it is perfectly all right if the supplier knows that you may be unhappy about his refusal of your offer. He will likely be worried about his competition and your motivation to shop around for a better deal. He will be more unlikely to raise his prices in the near future because of your aggressive action.

Make sure you are talking to the person who has the authority to agree to you proposal. The salesperson you normally deal with may or may not have the authority to change prices or terms. Some have the authority to modify the terms to some extent, some do not. If they say they will need to check back with their office, chances are they don’t have the authority. In those cases, call the sales manager or an officer of the company to get favorable results.

Don’t try this too often. It works best if rarely used and it is a surprise. Suppliers are not used to it.