Effective Purchasing For Small Businesses, Part 4 of 5

After a Purchase

In this blog post, we continue our discussion of how small businesses can use purchasing for their strategic advantage. In the first post, we discussed why purchasing is strategically important. The second post covered how the process begins with a thorough, written specification of the products/services you need and a request for bids from multiple vendors. In the third post, we covered requesting and comparing bids and managing delivery, payment, and your purchase history. In this post we cover what you need to think about after the actual purchase transaction.

Ranking and Reviewing your Suppliers

Relationships with your suppliers are crucial. Long-term relationships can lead to lower prices, as your supplier factors your relationship into their price quotes. Likewise, knowing your supplier will deliver crucial components on time and in good condition can reduce some of your business worries. At the end of a transaction, you can keep a vendor “report card” documenting how well the vendor performed and whether you recommend using that vendor again. The next time you request and receive a bid from the supplier you can factor the supplier’s “grade” into your purchase decision. Knowing that you are purchasing from reliable suppliers lets you focus on other aspects of your business.

Strategic Purchasing: Benefits Beyond Cost Cutting

When you adopt a strategic purchasing project you benefit your small business in more ways that just cutting expenses and freeing up precious cash to use for growth. Lower supply costs mean you can compete on price, when necessary, to win business. Closer relationships with suppliers can lead to better prices, favorable terms, and referrals to new customers. It’s clear that managing purchasing is crucial, but how do you find the time as a small business owner when your number 1 job is to focus on serving customers and increasing sales? In our final blog in this series, we’ll show you how to do this.

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