SafeSourcing® eProcurement Tools A one-stop shopping center

September 10th, 2020

Procurement Professionals: What tools do you have at your fingertips?

 

Todays post is from Ron Southard, CEO at SafeSourcing Inc.

In today’s world, sourcing and procuring the best product or service for your company has never been more challenging. Connecting with reliable suppliers is no easy task. Safety scares and product quality issues have made it more difficult than ever to obtain the peace of mind that you and your customer expect. What’s more, the universal demand to reduce our carbon footprint has skyrocketed in importance to individuals and businesses creating its own unique requirements and opportunities.

Accomplishing all of these important objectives at a price that’s right seems complicated, if not impossible. Combine that with increased time constraints and a workforce functioning with limited awareness of additional sources of supply and specifications for the products they are sourcing and you have a global procurement climate that can produce more than a few headaches, day in and day out.

An innovative alternative is SafeSourcing Inc. Our SafeSourceIt™ Procure to Pay family of solutions is loaded with efficient and comprehensive tools and programs that turn the procurement process into a highly productive endeavor. SafeSourcing is, literally, a one-stop shopping center.

Our clients have access to:

  • The entire SafeSourceIt™ Procure to Pay suite of solutions including our  popular  Reverse Auction Tools that can be used for all your sourcing needs including new contract purchases, spot buys, replenishment, aggregation, and collaboration with other buying organizations.
  • SafeSourceIt™ Supplier Database, an international 427,000 supplier database, which is specifically designed for ease-of-use. This unique database includes safety and eco controls and is one of the largest of its kind.

The SafeSourceIt Family of Procure to Pay Products and Services Includes:

  • SafeSourceIt™ eSourcing suite, SafeContract™, SafePO™, SafeCatalog™, SafeSurvey™, SafeDocument™ and SafeDashboard™.
  • Safety in Sourcing, a blog with daily updates and comments from your peers.
  • Sourcing WIKI, which includes thousands of procurement terms and definitions.
  • The SafeSourceIt™ Product and Services Specification Library
  • Daily Safety Alerts from the USDA, FDA, ISO, and other standards-creating agencies.

Our Goal is to keep the constant demands of your job at a minimum with our help.

If you’d like to learn more, please contact a SafeSourcing customers services professional and be sure to ask about our risk free trial.

 

 

 

Believe Me, You could be improving your profitability by up to 73%.

September 9th, 2020

That's right, Seventy-three (73%) percent!!!! And I don't care what retail format you have, the results will be similar.

 

Today’s post is by Ron Southard, CEO at SafeSourcing.

I wrote this post a number of years ago, and it is still true today. To many CEO’s believe they can have a huge impact in the sales area. Let’s rebrand and we can drive huge top line sales increases! BS. Yup BS. Many have tried and many have failed.

What they should be saying is let’s  MAKE MONEY. We are in business to MAKE MONEY. We can increase sales by focusing on sales. News flash, visit your stores  and  talk to your customers. Watch you associates. It will be come painfully clear what will improve sales.  You do not need to spend millions to rebrand. We can also keep more of those sales increases and reduce historical margins by focusing on reducing costs.

Read on if you want to learn something. Or go find an investor and delay the asset sale for a few more years.

I would  still be glad to personally discuss this premise with any Retail CEO or CFO that wants to challenge it! Let me do it for you. You’ll be surprised and be a hero and get a big bonus.

Let’s review exactly what a reverse auction is, how simple they are to use and the potential financial benefits?

Reverse auctions are web based  or Software as a Service (SaaS) tools that let retailers and other companies find the best suppliers for any resale or not for resale product or service they wish to source.  Using a web based reverse auction tool, retailers, other business or even large holding companies can locate and invite many more suppliers to take place in reverse auctions than they could possibly find or manage using traditional sourcing methodologies or even tools like BING or Google. During the reverse auction they can review on one screen all of the responses from suppliers, data about the suppliers, notes from the suppliers, product specifications and other necessary information in an instant. Upon auction conclusion which is typically less than 30 minutes including extensions host companies can review potential savings scenarios and award business right from their desktop. Sound simple? That’s because it is.

Now let’s get to the simple financial benefits. Let’s assume a $150M smaller Retail Company with industry average earnings of one percent or $1.5M. Additionally cost of goods for this company is 70 percent or $105M. Let’s also assume this company were to only source ten percent of their for resale goods spend or roughly $11M. With well below industry average savings of just ten percent, total savings generated would be $1.1M which is a direct impact to net profitability. If all other segments of the P&L perform to plan and all savings are recovered during the same business calendar year net profitability would increase to $2.6M or a 73% improvement.  Again this assume no tributes to Caesar or other funny accounting associated with new capital plans and the like

So, why don’t many companies use reverse auctions and other e-procurement tools? That’s a great question! Maybe someone out there has an answer.

If this author were you, I just could not ignore this type of opportunity.

If you’d like some examples of the types of savings SafeSourcing can generate for you by size of spend and category, please contact a SafeSourcing customer services account manager.

We look forward to and appreciate your comments.

Do you know what types of software delivery models are available to you?

September 4th, 2020

If you're a procurement professional here are some basics for choosing the right model for your company!

 

Today’s post originally from 2015 is from our SafeSourcing Archives and still relevant today!

If you’re not very imbedded with what’s going on in software development today, you have heard terms like “Software as a Service”, or “Open source” thrown around, but may not know much about what they may mean. And if you are having to make decisions for your company about the kind of software tools you use, you may find yourself needing some basic understanding of the different models for deployment that are available. Many of these models have similar components to them, but may not have the same full structure. As such, it can get a little confusing, but will be important to know the differences so that you know what to look for if for example you don’t need hosted service, but do need support, though not unlimited licenses, etc.

  1.  Software licensing model: A company creates the software, and sells to customers for a one-time fee. It is essentially the customer’s responsibility to manage all aspects of the software as needed, for which all costs are borne by the buyer.
  2. Outsourcing model: Here you may purchase a software solution for a one-time fee, but also outsource support and development, rather than take on the responsibility in-house. This can be advantageous for cost savings, but brings with it many of the same risks and obstacles the come with doing multinational business.
  3. Hybrid Model: In this model, the buyer purchases the software upfront, but then the seller is paid regularly for ongoing service. So if a buyer wants to own the software, but doesn’t have the datacenter to host the software, this model may be a good solution.
  4. SaaS (Software as a Service) Model: A subscription based model, in which a buyer pays for both access to the software, and hosting performed by the seller’s resources. This model has been leapfrogging all other models because it allows segmentation of specialty, where someone with a great idea but no software expertise, can pay those with the technical skills to support businesses that never would be able to get off the ground otherwise. According to Gartner, “The traditional deployment model for on-premises software is expected to significantly shrink from 34 percent today to 18 percent by 2017”[1], and there are more and more options becoming available as SaaS providers continue to multiply.
  5. Open source model: In this case, the software is free (usually online) for the taking, but often unfinished, and unsupported. Many large and widely deployed products had their start as an open source project; however turning the software into a commercially viable product can still be very expensive to develop.

________________________________________________________

[1] “Gartner Survey Reveals That SaaS Deployments Are Now …” 2014. 15 Nov. 2015 <http://www.gartner.com/newsroom/id/2923217>

For more information on how SafeSourcing can assist your team with this process or on our “Risk Free” trial program, please contact a SafeSourcing Customer Service Representative. We have an entire customer services team waiting to assist you today.

We look forward to and appreciate your comments

 

eRFX Strategies for Success Part VI the  Request For Quote  

September 3rd, 2020

Getting the most out of your Request for Quote or Reverse Auction eSourcing events Part II Details, Missing Pieces and Communication.

 

 

 

Today is the final edition of this VI part post from Ron Southard, CEO at SafeSourcing Inc. You can download each link or just download my Whitepaper by the same title. If you follow these guidelines, you are on your way to controlling the cost of any category you take to market.

In  parts one, two, three items 1-4 and four items 5-8  and five RFQ Part I of II we have discussed  that the world of procurement is continually changing, and this includes the world of eProcurement when it comes to the request for information, a proposal, or a quote and why this process when used properly even with newer tools is still the most effective results delivering procurement process available.

The Request for Quote (RFQ) Part II of II Details, Missing Pieces and Communication

Details, Details, Details. In the RFQ, send an invitation to potential suppliers containing a detailed list or description of all relevant parameters of the intended purchase, such as:

  • Personnel skills, training level or competencies
  • Part descriptions/specifications or numbers
  • Quantities/Volumes
  • Description or drawings
  • Quality levels
  • Delivery requirements
  • Term of contract
  • Terms and conditions
  • Other value-added requirements or terms
  • Draft contract

An RFQ event can have many suppliers participating in your project. They will all be actively participating during the RFQ in a preset timeframe, which is usually 20 minutes, but can be adjusted when the line item count grows over 25 items.  Within the 20 minutes, suppliers can lower their bid pricing an unlimited amount of times. Like sealed bidding, suppliers cannot see one another’s pricing. Suppliers see whether or not their quote is the low quote through the use of a low quote indicator when they achieve that milestone by fishing for it. Suppliers may also see their ranking at a predetermined point in the RFQ process if the strategic decision to use that feature has been made.

Missing Pieces. An easy way to establish specifications and develop base pricing is from the RFP responses submitted earlier.  Many times, a list of suppliers is established that has already been educated on entering pricing through an online sourcing or bidding tool. The RFQ gives the supplier the opportunity within the live RFQ to view whether or not if they have any low quotes and to “sharpen their pencils” in order to lower their pricing if they wish to do so. From this RFQ, an award of business based on the results can be made.

Training and Communication. Suppliers should be trained as to how to use the eProcurement system, how to place their bids, how to look for the low quote indicator, and also be communicated with relative to questions, pricing, and products and services you are looking for. The overall goal is to drive the best overall value, so suppliers should have an opportunity to enter notes during the RFQ. This additional information often offers additional hidden savings opportunity, i.e. if 1,000 cases are purchased rather than 900 cases, additional discounts, or other value-added services such as freight waived for the first 6 months of a 1-year contract if awarded the business. These additional notes can provide and overall benefit, rather than just a low-price win.

Returning to our original RFI example of a company owning a building they intend to repurpose as a Distribution Center, the process began as an RFI in order to understand what was needed so it could be followed by an RFP in order to collect further detailed information and base pricing. These two steps were then followed by an RFQ to compress the pricing from suppliers who participated in the RFP and were invited to this final stage.  In this last stage running the line items as a complete list of materials rather than an item by item list, total cost of freight, total installation pricing- which could include teardown pricing which could also be listed as its own line item can have great value and provide the opportunity for the suppliers to keep their focus where it is needed rather than on 100’s of individual line items submitted during the RFP. The four items mentioned here represent the largest spend items of the proposal and have the opportunity to lower pricing by 20% or greater from the original RFP pricing.

Determining what stage of the eRFX process to begin with and how to assemble those pieces can be a difficult puzzle to put together especially if a procurement team is already engaged in a myriad of other daily activities. A good Strategic Sourcing solution provider can help put these pieces together in a way that requires less of your company’s time and resources.

If you’d like to learn more and can’t wait for the series conclusion, please contact a SafeSourcing Customer Services associate, they’d be thrilled to hear from you.

Thanks.

eRFX Strategies for Success Part V the  Request For Quote  

September 2nd, 2020

Getting the most out of your Request for Quote or Reverse Auction eSourcing events Part I of II

 

Today’s post is from Ron Southard, CEO at SafeSourcing Inc. This post also includes input from the many talented teammates I work with every day and my Whitepaper by the same title.

In  parts one, two, three items 1-4 and four items 5-8 we have discussed  that the world of procurement is continually changing, and this includes the world of eProcurement when it comes to the request for information, a proposal, or a quote and why this process when used properly even with newer tools is still the most effective results delivering procurement process available.

The Request for Quote (RFQ)

A Request for Quote is typically used to solicit price and price related details such as freight, that meet minimum quality specifications for a specific quantity of specific goods and/or services. “RFQs are usually not advertised publicly, and are used commonly for (1) standard, off-the-shelf items, (2) items built to known specifications, (3) items required in small quantities, or (4) items whose purchase price falls below sealed-bidding threshold. Suppliers respond to an RFQ with firm quotations, and generally the lowest-priced quotation is awarded the contract.” 4

Though the above historically represented the industry standard as to what an RFQ was, it is important to expand on each of the points and understand the pieces from a historical and practical standpoint.  With online eProcurement tools suppliers have an indication of where they stand and an opportunity to adjust their pricing should they choose. In standard practice this is done by phone calls or e-mails and one at time. As such it is very time consuming and does show some savings, but not nearly the rate of success online tools have historically provided.

Standard, Off-the-Shelf Items. This is a standard misconception of procurement departments everywhere.  The fact is that virtually any product or service can be taken through the eRFX process.  Strategic Sourcing solutions providers with extensive global supplier databases can invite a number of new suppliers to participate in the bidding process on whatever items or service may be required.  Many will have some level of experience in successfully participating in eRFX events in a variety of functional areas within the organization such as HR, Marketing, Construction, and IT to name a few.

Items Built to Known Specifications. While this is a valid concern, it is also the biggest reason why projects are never taken out to bid; not having specifications or having the time to assemble them.  Working with 3rd party procurement solution providers companies are more able to cover all their needs, taking into consideration all of the moving parts that affect these items. Such as freight, fuel surcharges, additional fees, and hourly rates.  Results can be achieved that are comprehensive enough to allow strong decisions once the project has been completed.

Items Required in Small Quantities. Another misconception about RFQs are the quantities of items that can be sourced and duration of time for which those quantities are needed.  There should be no limits at all, including number of items to have the suppliers bid on. With that established, however, there are always unique strategies to every RFQ so that the host company can end up with the most complete set of information while allowing suppliers to focus on those areas that need the most attention.  This is part of the service that needs time to be considered as sourcing projects are strategized and developed.

Items Whose Purchase Price Falls Below Sealed-Bidding Thresholds. The recommended approach for pricing within the RFQ should be analyzed based on the historical spend, also taking into account any price indexes that can affect future pricing increases. Using historical spends and any additional information available, a max quote is often established that the suppliers must meet prior to participation. Setting a price decrement is also strongly recommended, and often plays a key role in the strategy as to how you would like to have the suppliers act, giving them the flexibility to make price adjustments they are comfortable with while driving savings as part of the process.

Understanding the differences between historical RFQ strategies and changes that are resulting in stronger results is the beginning of assembling the right strategy for your project.  Strategies that have proven successful in the past generally have similar features in common and drive the two most important aspects of every project, valuable results, and supplier participation.

Check Back tomorrow for our final post of this series the RFQ Details, Missing Pieces and Communication.

If you’d like to learn more and can’t wait for the series conclusion, please contact a SafeSourcing Customer Services associate, they’d be thrilled to hear from you.

Thanks.

 

eRFX Strategies for Success Part IV the reason for an RFP Items 5-8

September 1st, 2020

Getting the most out of your Request for Proposal  eSourcing events items 5-8.

 

Todays post is from Ron Southard, CEO at SafeSourcing Inc. This post also includes input from the many talented teammates I work with every day and my Whitepaper by the same title.

In  parts one and two and three we have discussed  that the world of procurement is continually changing, and this includes the world of eProcurement when it comes to the request for information, a proposal, or a quote and why this process when used properly even with newer tools is still the most effective results delivering procurement process available.

The Request for Proposal (RFP) items 5-8

  1. Data Requirements: This can vary from RFP to RFP, but every project should collect basic information about the vendors such as, their name, address, primary business, who the primary contact will be with their specific contact and other related information, usually a list of 3-5 references and a list of current businesses that are similar in size to the company running the RFP.
  2. Terms and Conditions: General and special arrangements, provisions, requirements, rules, specifications, and standards that form an integral part of an agreement or contract.
  3. Description of Goods and/or Services to Be Procured: This description defines what is being requested. It is a bridge between the scope of work and the specifications. This area is typically where vendors are asked to give their proposal of price based on the needs defined and within the guidelines of the specifications.
  4. Instructions for Preparation of Technical, Management, and/or Cost Proposals: These are the details on how to complete the RFP. Typically the supplier will be given a deadline to complete the RFP, to complete training on how to enter Responses and Pricing, and the additional information the customer may need as supplemental documentation and how to submit that information.

In the example I used in the RFI section, (Owning a new or used facility and turning it into a Distribution Center) It may be known where the racking should be located, how much racking is required (this would include a set materials listing), the details of labor to install new materials and remove and re-rack another area. All of these details are required for the suppliers to bid the job appropriately. Within a very detailed RFP there are fewer chances for over or under bidding from the suppliers. The quality of an RFP is very important to successful project management because it clearly delineates the deliverables that will be required.

The details received from an RFI can be used to build the specifications for an RFP. Multiple suppliers have verified and provided details needed to complete the project. The RFI may also produce details not previously known, for instance in the racking project: if the location is in California or other geographic areas prone to seismic activity a seismic analysis will also be required to complete the work. This can be completed, but for an additional charge from the supplier. Suppliers may all have similar products, but they may not be compatible to other supplier’s materials.  In other words, their product will be proprietary and not interchangeable if a repair is required in the future. These details and more need to be inserted into the new RFP.

So how can an RFI be combined with an RFP?  If there needs to be a high level of knowledge about a product, project, or service, but the same supplier has been used exclusively for a long period of time and it is unclear as to whom additional sources of supply might be. An RFI could be combined by asking the questions specifically related to the new potential suppliers; who are they, where are they located, what is their business structure, who the contacts are, what areas or locations can they service, what are their references, etc.  Along with the specifications and details of the RFP, an overall picture will develop of who the company is, what they can or cannot provide, and what their pricing structure will be.

With an idea of how to collect information on a project with little initial data through an RFI and details on collecting RFP responses with the known information, the next step is ensure understanding relative to the best value, data and price from the suppliers that can handle the opportunity.

Tune back in tomorrow when we will explore the Request for Quote or RFQ.

If you’d like to learn more and can’t wait for the series conclusion, please contact a SafeSourcing Customer Services associate, they’d be thrilled to hear from you.

Thanks.

 

 

 

eRFX Strategies for Success Part III the reason for an RFP Items 1-4

August 31st, 2020

Getting the most out of your Request for Proposal  eSourcing events

 

Todays post is from Ron Southard, CEO at SafeSourcing Inc. This post also includes input from the many talented teammates I work with every day and my Whitepaper by the same title.

In  parts one and two we have discussed  that the world of procurement is continually changing, and this includes the world of eProcurement when it comes to the request for information, a proposal, or a quote and why this process when used properly even with newer tools is still the most effective results delivering procurement process available.

The Request for Proposal (RFP)

A Request for Proposal (RFP) is a document used in sealed or electronic bid procurement procedures through which a purchaser advises the potential suppliers of (1) statement and scope of work, (2) specifications, (3) schedules or timelines, (4) contract type, (5) data requirements, (6) terms and conditions, (7) description of goods and/or services to be procured, and (8) instructions for preparation of technical, management, and/or cost proposals.  As an example, government RFPs are publicly advertised and suppliers respond with a detailed proposal, not with only a price quotation. They provide clearly quoted specifications for negotiations after sealed proposals are opened, and the award of contract may not necessarily go to the lowest bidder.2

Breaking down each of these 8 pieces of information will help to form an  understanding as to whether there is enough detail to move straight to an RFP,  thus skipping the Request for Information altogether.

  1. Scope of Work: This refers to all of the elements that should be included in the proposal for the project and is generally specific to each customer along with the data and metrics provided to shape it. Simply, this is the definition of the needs and expectations for the work needing to be completed.
  2. Specifications: “An exact statement of the particular needs to be satisfied, or essential characteristics that a customer requires (in a good, material, method, process, service, system, or work) and which a vendor must deliver. Specifications are written usually in a manner that enables both parties (and/or an independent certifier) to measure the degree of conformance. They are, however, not the same as control limits (which allow fluctuations within a range), and conformance to them does not necessarily mean quality (which is a predictable degree of dependability and uniformity).”3 Generally, specifications will be broken into either performance or technical specifications that define the types of goods or services needed from the vendor community. Developing strong specifications ensures proposals containing exactly what is needed. As a result, vendors will know not to over bid or under bid.
  3. Schedules or Timelines: This is the time frame of the expectation of when the RFP is sent to the vendors, when questions (about the specifications or the RFP process) are due from the vendors, when the vendors can expect the questions with answers to be returned, and when the RFP is due to be completed.
  4. Contract Type: This defines to the vendor if the contract is a spot buy, a one year, two year, or longer contract. There may also be additional special contractual requirements added within this area.

Tune back in tomorrow when we will explore the Request for Proposal or RFP items 5-8.

If you’d like to learn more and can’t wait for the series conclusion, please contact a SafeSourcing Customer Services associate, they’d be thrilled to hear from you.

Thanks.

eRFX Strategies for Success Part II the reason for an RFI

August 28th, 2020

Getting the most out of your Request for Information eSourcing events

 

Todays post is from Ron Southard, CEO at SafeSourcing Inc. This post also includes input from the many talented teammates I work with every day and my Whitepaper by the same title.

In yesterday’s post we discussed  that the world of procurement is continually changing, and this includes the world of eProcurement when it comes to the request for information, a proposal, or a quote and why this process when used properly even with newer tools is still the most effective results delivering procurement process available.

The Request for Information (RFI)

A Request for Information (RFI) is a request made typically during the project planning phase where a buyer cannot clearly identify product requirements, specifications, and purchase options. RFIs clearly indicate that award of a contract will not automatically follow.1

An example for use of an RFI would be if a company acquired a used warehouse that needed to be turned into a distribution center. The facility has some racking installed but needs more.  There has not been a defined idea of what layout will be needed to improve the warehouse for DC use, nor what types of rack are needed, how much material is needed, nor how long it will take to install the racking. The existing racking is in adequate shape, but it is unknown whether it is safe, placed appropriately, outdated, or even needed in any way. A situation like this is often a good time to rely on experts to provide feedback as to these needs.  The best practice would be to get a minimum of 3 sets of data submissions, but I would recommend getting 4 to 6 submissions from your request for information from racking manufactures, distributors, and/or installers.

The higher supplier count, in an area where you have no knowledge, provides the necessary data to begin to make more informed decisions.  With at least 3 submissions it becomes clearer if there are major differences between suppliers and how they operate.  Lead time, outsourcing, and geographical coverage are all very important pieces of information to gather from the suppliers at this stage of a sourcing project.

The application of an RFI can be used on new goods for use, re-sale, packaging design, any and all services, software, hardware, equipment of any kind, actually it is limitless as to what you can utilize an RFI for in business.

Tune back in tomorrow when we will explore the Request for Proposal or RFP?

If you’d like to learn more and can’t wait for the series conclusion, please contact a SafeSourcing Customer Services associate, they’d be thrilled to hear from you.

Thanks.

 

eRFX Strategies for Success!

August 27th, 2020

Getting the most out of your eSourcing events!

 

Todays post is from Ron Southard, CEO at SafeSourcing Inc. This post also includes input from the many talented teammates I work with every day and my Whitepaper by the same title.

Every sourcing project is different, from the data you start with to the results you hope to achieve and how to get there in a way that delivers great results and great participation. Knowing where to start and the path to travel is key to achieving both of these goals.

The world of procurement is continually changing, and this includes the world of eProcurement when it comes to the request for information, a proposal, or a quote.  The differences between the three requests, what expectations are when receiving the requests back, and how to make a sound business decision with what has been submitted are what separate each stage in giving procurement professionals the blueprint as to where to begin in the process.

While technology continues to evolve and have significant impact on the procurement space, is it bringing better results than the tried and true processes that have evolved but are seldom followed in their entirety. These processes have been in place for years. What are they, how to do them correctly and maximize your results, that is the real trick? If you cannot do them on your own, it may make sense to look to companies that can deliver them consistently in the form of white glove software as a service.

Tune back in tomorrow when we will explore the Request for Information or RFI?

If you’d like to learn more and can’t wait for the series conclusion, please contact a SafeSourcing Customer Services associate, they’d be thrilled to hear from you.

Thanks.

 

In Negotiations, Price Matching Barely Scratches the Surface

August 26th, 2020

Why this traditional negotiating tactic is giving you a false sense of accomplishment!

 

Today’s post is by Dave Wenig, Senior Vice President of Sales and Services at  SafeSourcing

Every day, I talk with buyers of all sorts about their procurement processes. While I do get to hear some really interesting perspectives, I also get to hear some really old perspectives over and over again. One of the worst and oldest offenders is price matching.

It goes like this:

A buyer feels that the price she pays for her product or service is higher than it should be. So, she asks a competitor to provide her with a quote. She then takes that quote to her incumbent vendor and asks them to beat or match the price. It’s simple, and it is technically successful, because it delivered savings. I hear that this often generates 5-15% discounts. I’m not impressed by this.

What to do instead?

Testing the pricing in the market by asking for a quote is alright. So is asking your incumbent vendor to sharpen their pencil. But, it’s at this point that there is room for improvement. Any time your vendor signals that they are willing to offer a better rate like in the example above, they are tipping their hand. We now know that they are willing to reduce their margin to keep your business and that they do, in fact, have margin to reduce. It’s at this point, that we recommend applying a lever in the negotiation. An RFQ is a great lever because it creates an environment where the vendors are forced to compete live against each other for the lowest cost. Why have a vendor match a price and manually facilitate this slow type of back and forth? Let the vendors duke it out until they are done. Go grab some popcorn watch it happen. This will probably increase your savings by at least double.

Whatever you do, don’t settle for negotiating tactics that should have died with the dinosaurs. Modernize and use the tools at your disposal to win better.

If  you would like more information on how SafeSourcing can help you, please contact a SafeSourcing Customer Service representative.  We have an entire team ready to assist you today.