Procurement

The Power of the Purchaser

Many small business owners do not realize what kind of power they wield. To utilize their purchasing power, business owners need to be able to track their spending on a monthly basis. Once they have a purchase history , they can renegotiate based on their volume.

Here are some recommendations for immediate purchasing power:

1). Chambers & Associations – Local chambers and member associations are a great resource for purchasing power. As a result of volume with an individual supplier, members are able to take advantage of preferred pricing. Though the chamber or association might not have the staff on site to handle a project like this, they can partner with a vendor or group purchasing organization where the chamber/association can also receive a rebate or revenue share as an added benefit.

2). Group Purchasing Organization – Procurement Concepts, is a Group Purchasing Organization (GPO) that combines the purchasing volume of their membership base to achieve extreme discounts. For example, Procurement Concepts partnered  exclusively with Staples for office related products after going through a rigorous proposal process with the largest office related products vendors. Due to Procurement Concepts’ combined purchasing volume with Staples, members are able to save up to 83% off list price. In addition, Staples is able to increase their business by acquiring new customers. It truly is a win-win situation.

3). Shop the Buyer’s Market – Vendors are all dedicated to keeping customers loyal and active. If your cleaning supply vendor knows you are shopping your price around, they will likely hope to keep your business and match or beat any other offers. I highly recommend auditing your spending habits each quarter or bi-yearly so you can take advantage of market changes and developments.

These are just a few ways to take advantage of your purchasing power for a competitive advantage. Of course, keep in mind that relationships are extremely important and that quality of products and services can trump low prices. Remember, you get what you pay for.