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Don’t make this critical negotiating mistake
Are You Leaving Cash on the Table?
When buying for your business, are you discussing terms as well as price?
Improve your bottom-line profit by negotiating favorable terms with suppliers.
Price negotiations are usually a critical part of the purchasing process, but price is not the only issue to consider when you’re working out a vendor agreement. Beyond the cost of the item itself, look at quantity discounts, add-ons (such as freight and insurance), and the payment terms.
Quantity Discounts
To determine the true value of a quantity discount, calculate how long you can expect to store the material and what your cost will be for carrying the inventory, then add that to the cost of the goods. Remember to factor in a certain amount of spoilage for items that might get damaged or otherwise become unusable or unsellable while you are storing them.
Compare that total with your cost for buying a smaller quantity that you’ll move quickly before making your decision on quantity.
Quantity discounts are often available if you make a long-term purchase commitment. Some suppliers may be willing…
