WAYS TO SAVE MONEY AND IMPROVE PROCUREMENT

In Contracts by Clyde Mooney

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By Sam Trattles

When you feel like there is a revolving door of salespeople flogging you their wares, it’s time to review your procurement negotiation strategy.

Sam Trattles

In this article we will explore some tips for how this review should lead you down the path of negotiating better deals, ideally with fewer dealers, and ways to say “thanks, but no thanks”.

Do an audit

Consider what you actually need. Start by pulling a report from your accounting software of:

  • What you are buying
  • Who you are buying from, and
  • How much it’s costing you

Consider your positioning

Take this comprehensive list of everything, and take a walk around your venue, noting what’s really necessary, and what you might like to change or increase.

A good lens with which to overlay your requirements is clarity on your brand, and how it positions you in the market. Being clear on what type of atmosphere you offer, and who are your ideal customers, should help negotiating in line with this profile, and saying no to anything outside of it.

For example, if you had ‘Great Southern lamb’ on the menu – versus simply ‘lamb’ – does that matter to your customers? Which one better aligns with what you want your customers to experience?

If you know the answer to these questions, you will only spend in line with that profile. This will give you better buying power, and the confidence to only negotiate things that will enhance your venue and attract more ideal customers, because it all makes sense.

Compare and consolidate your suppliers

Now you have a clear picture of what you need, based on the findings from your audit and brand positioning assessment, it’s time to negotiate some new supplier deals.

Look through your current supplier list, review their websites with a view to seeing if you can get more things from fewer suppliers. Note down your findings.

Consider which suppliers you most like working with. Which ones are trying to do you a good deal? Which suppliers consistently have great incentive programs that align with your staff reward and retention objectives?

If there are multiple suppliers who could help with your consolidation plans, create a shortlist and invest time writing a briefing paper for them. It doesn’t need to be complex, simply outline that you want to reduce your supplier numbers and want them to let you know their best deals on a list of products. You would like them to outline why you should choose them over another supplier.

Having this comparison will give you a great perspective on relative pricing, and give you the information you need to negotiate a great deal.

Practice saying no

In the future there will still be plenty of potential suppliers wanting you like to try their products, but with clarity on your positioning, and a selection of preferred suppliers, it is that much easier to say, ‘Thanks, but no thanks,’ and know exactly the reasons why.

You may also want to consider who in your team is having these procurement conversations. Could they use some training to upskill them, or are they confident to negotiate great deals with suppliers, and know when to say no?

It’s important not to get distracted by the shiny things suppliers bring to offer. Make sure purchases align with your brand, your objectives and your budget.

About Sam Trattles, Other Side of the Table

Author and strategist, commercial deals negotiator who has closed upwards of $450m in deals across sport, music, the arts, philanthropy and grass roots programs.