Tip 1: Establish purchasing alliances
By means of purchasing alliances, especially small and medium-sized companies can improve their negotiating position vis-à-vis suppliers, and in this way achieve a reduction in the purchasing costs. In a purchasing alliances with one or more other companies, you bundle demand, and thus jointly purchase on more favorable conditions. Purchasing alliances, however, offer more than just short-term benefits. The synergistic effects achieved through the joint purchasing may, in the long term, serve to strengthen market positions and secure economic independence.
Tip 2: Fend off price increases
Strictly speaking, you do not have to accept a supplier's price increases without protest. Instead, try to defend yourself against the communicated price increase in writing. Substantiate it, for example by stating that you are, in your industry, not able to pass on any higher prices to the customer due to the situation of there being major competition. Or does a long-standing relationship with the supplier already exist? Then make reference to precisely that and emphasize that the collaboration is also important to you in difficult times. It pays off: Experience shows that well worded defensive letters can definitely lead to cost reductions in purchasing, given that suppliers, in many cases, will revoke their new terms or at a minimum reduce them.
Tip 3: Ask for price discounts
Is a purchase price too high for you? Negotiate it! That's absolutely normal in business, and in particular between suppliers and purchasers. What's important is that you have a clear, realistic price in mind. You should also be in a position to explain your point of view, in a firm, but friendly, way. Point out, for example, your longstanding partnership. Or how you and your company always stand by your suppliers, even in difficult economic times. Practice shows that only a few suppliers reject this kind of support - especially those with whom a company already has a long and close cooperation. And should the outcome not be a long-term price discount, then maybe a short-term one, or at least the assurance of stable prices from a long-term perspective? You will achieve a reduction in the purchasing costs one way or another.
Tip 4: Reward your staff for good work
Rewards may also lead to a reduction in the purchasing costs. Get your staff involved in the success of the company and motivate them with, for example, bonuses. Your employees will not only be pleased to be rewarded for their work, but will also like the positive feedback and appreciation. And bonuses don't always have to be one-off cash payments. You can also give staff non-cash rewards, such as professional training courses, contributions to nursey fees or discounts. Another advantage: You can even give your employees these bonuses tax free. This is also a way to reduce costs in the purchasing department.
Tip 5: Check the delivery conditions
Many suppliers offer their customers "free" shipping. But does this mean that delivery of the desired products is really free and as inexpensive for your company as it may at first seem? What about transport insurance, which is needed to cover the desired goods up until the point at which they are on your ramp? And, even if the supplier bears all the freight costs, this does not necessarily need to be at a more favorable price for companies. Perhaps your company has very good freight margins, however the supplier, on the other hand, particularly in the case of smaller companies, receives less favorable conditions due to lower freight volumes. In this case, it may be cheaper for you to pick up the goods yourself and reduce the overall purchasing costs as a result.
