Today’s post is by Ronald D. Southard, CEO at SafeSourcing Inc

Bargaining power is the power which one party may have to influence another in a negotiation. Through negotiation, companies will work together in collective bargaining to increase their bargaining power by increasing their purchase sizes.  In addition, a party’s bargaining power is a key factor in determining whether or not trade occurs and how the value created is distributed. Other factors that may affect bargaining power include buyer’s leverage and the marketplace.

It’s often surprising to our customers when the run an online RFQ or Reverse Auction as to the amount of savings they achieve. Every customer or prospect tells us that they are very skilled at negotiating and get the best prices available in the market. They often assume this based on their size, industry status, relationships, and a myriad of other reasons. They are always wrong. I tell small chains that they can get the same prices as large chains about always. Ok, maybe not Walmart or Amazon prices, but close if not the same.

They real key to getting the best price and terms is to have a large number of suppliers that want your business and have the capacity to service you. Most buyers are not aware of the number of suppliers that are available to bid for their business, and how to leverage them for the best price. At SafeSourcing we use our SafeSourceIt™ eProcrement tools that encourage behavior based on a variety of settings. In a recent food related event, we invited thirty suppliers to participate. Some were local, others national and others regional. All wanted the business, and our customer is willing to change suppliers if needed.

SafeSourcing is an eProcurement company that operates across multiple industries. As such we have specific experience in almost any commodity, service or capital related spend. Our SafeSourceIt™ Global Supplier Database is an often-used to assist companies in finding vendors that want to bid for your business, please contact a SafeSourcing customer services associate.

Today’s post is from Ron Southard CEO at SafeSourcing Inc.

Aggregation is a process whereby a number of a firm’s smaller projects are combined and treated as an individual project. The main purpose of aggregation is to ensure accurate reporting and compliance with regulations regarding the permitted levels of provisional limits for a single commodity.  Aggregation is also a total made up of different parts from various sources.

The SafeSourcing Inc Collaborative Aggregation Philosophy supports the thought that disparate buying groups can on occasion work together successfully as a loosely coupled purchasing organization in order to combine volumes for better pricing consideration by suppliers. Often the specifications for these events need to be very similar in nature such as office supplies or other similar categories. Separate shipping charges and other terms and conditions may apply to each participant. Participants must support single supplier award in order to ensure the success of collaborative aggregation events to ensure that suppliers honor their prices.

We have recently seen a lot of activity in this area with dramatic savings for spends of all different sizes. Some categories have even achieved savings of over 30%. That’s 30% better than what you negotiate.We mapped these savings and are seeing some retailers with as few as 20 stores paying less than some very large customers who ran these categories during the last two years.

The markets are ripe! If you would like to learn more about how our customers and suppliers collaborate and aggregate to work together, please contact SafeSourcing.

Source:  www.fitchtraining.com

Today’s post is by Ronald D. Southard, CEO at SafeSourcing Inc.

Are you working to control all costs. Simply, that would be Cost of Goods which impacts your gross margin. Or it could be indirect spend that will impact net earnings. Or are you focused on capital, which is really the spending controlled by the emperor. Minus the humor, you should be focused on all three if you want to please all stake holders.

So, what is indirect spend?

Indirect goods and services are any purchases that do not end up in the product or service delivered to the customer. These are not only necessary expenditures to support the deliverable product or service but are also shared across the entire business organization. Examples of indirect goods and services might be interest expense, depreciation expense, costs associated with preparing and presenting proposals, administrative expenses, etc.

Here are some indirect items in retail that are all showing surprising reductions in cost right now.

1. Lawncare
2. Firewood
3. Cleaning Services
4. Waste Removal
5. Ice Programs
6. Beer Caves
7. Facia
8. Lighting
9. Floor Tiles
10. Ceiling Tile

SafeSourcing is an eprocurement company that operates across multiple industries. As such we have specific experience in almost any commodity, service or capital related spend. Our SafeSourceIt™ Global Supplier Database has over 500,000 suppliers that can reduce your costs today. You are paying too much for about everything. To learn more, please contact a SafeSourcing customer services associate.

Today’s post is by Ronald D. Southard, CEO at SafeSourcing Inc

You should be asking smaller suppliers if the qualify as a Second Tier Sourcing Option.

Companies should let their customers know if they are a minority owned, partially owned, woman owned or veteran owned business. Many companies plans call for supporting these types of businesses so why not let them know. SafeSourcing is a veteran owned business.

Second Tier Sourcing is a procurement policy that is used by various Fortune 500 corporations. This is a practice of rewarding suppliers for attempting to achieve minority-owned business spending goals of their customer(s).

The program was created by the Chrysler Corporation in 1993 and now extends throughout the Fortune 500. In 2005, Toyota set a goal of 10% for their suppliers and holds an annual matchmaking event to help their suppliers achieve those goals.

SafeSourcing is an eprocurement company that operates across multiple industries. As such we have specific experience in almost any commodity, service or capital related spend including software and development costs. Our SafeSourceIt™ Global Supplier Database is an often-used to assist companies in finding vendors that are Second Tier, please contact a SafeSourcing customer services associate.