Archive for the ‘Sourcing Strategy’ Category

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Brand/Current name or equal specification

Monday, July 24th, 2023

 

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

Do manufacturers deliberately make it difficult for you to source comparable products?

They really try to. It is like our comes in a seventeen-ounce bottle and fits better on your shelving than their twenty-ounce bottle. How many examples can you come up with? The fact is if you do not understand how to use Brand name or equal in your sourcing, Current, or equal and have the right responses for vendor participants, you will always pay more for your products. Please read on to understand the subtle difference in a Brand/Current Name or equal specification.

Brand name or equal specification is a specification that uses one or more manufacturer’s brand names or catalog numbers to describe the standards of quality, performance and other characteristics needed to meet the requirements of a solicitation and provide for the submission of equivalent products.  In addition, a brand name or equal specification could often obtain a competitive edge by basing a bid on an equal product which is less expensive than the brand-named product specified.

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 make Brand/Current or equal sourcing easy to accomplish. You are probably paying too much for about everything. To learn more, please contact a SafeSourcing customer services associate.

 

 

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Indirect Goods and Services!

Thursday, July 20th, 2023

 

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.

 

 

 

 

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Bargaining Power

Wednesday, July 19th, 2023

 

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.

 

 

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Who you going to call?

Monday, July 17th, 2023

 

Today’s blog is by Margaret Stewart, Director of HR, and Administration at SafeSourcing

In any business-to-business company, you can expect to be in constant communication with those organizations you rely on. You may even know many people well and might know their numbers from memory. A company like SafeSourcing is no exception. We often are emailing and calling other companies a significant amount of time.

One trend many of us have begun noticing, and you may have noticed this as well, is that a lot of companies no longer provide phone numbers or email addresses to reach them. While I certainly understand the workforce required to answer so many calls and emails, it can lead to some frustration when you are unable to reach someone.

This is surprisingly true oftentimes of sales as well. In order to be able to sell a product or service, consumers and other organizations must be able to reach you. While there may not always be a sale at the end of a conversation, there absolutely cannot be a sale if that conversation never takes place.

Having people available to answer inquiries can set your organization apart. It not only demonstrates that you care about those trying to reach you, but also provides an opportunity to gain more business. Most marketing companies find ways to promote an organization and increase traffic to sites or stores in the hopes that business can expand, so why not provide every opportunity to reach those people.

If you are having trouble reaching companies or if you simply need help with your own procurement team, SafeSourcing is always available for a phone call or email and can help you get to the right person for what you need.

For more information on what the SafeSourcing team can offer you, or on our Risk Free trial program, please contact a SafeSourcing Customer Service representative. We have an entire team ready to assist you today.

 

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Seller-Driven Auctions

Tuesday, July 11th, 2023

 

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

At SafeSourcing we run many seller driven auctions. These may come in handy as the supply chain loosens and retailer realize they have way overbought and have backrooms full of dated products. We actually use our Forward Auction Tool from our SafeSourceIt™eProcurement Platform. This is also a great way to reduce SHRINK which I have written about in the past

A seller-drive auction is an auction where sellers post goods for sale and buyers will bid on them. A good example of a seller-driven auction would be eBay©. A seller would place a particular item that they want to sell online, and buyers wanting to purchase that item will place bids trying to ultimately win the auction for the product (s).

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 including companies that often bid on aged inventory. You are probably sitting on quite a bit of inventory right now. To learn more, please contact a SafeSourcing customer services associate.

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What is the benefit of a ranked reverse auction?

Thursday, June 29th, 2023

 

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

A tool that can be effective when running a reverse auction is called ranking. While this feature is not used all the time, it can be of strategic importance when trying to get to the best net landed cost for products that have very slim margins at the supplier level. The feature can be set up to let all suppliers know where they rank or a select number of suppliers like the top five (5). The feature can also be turned on for a specific time during the auction like in the last 5 minutes. As an example, you might have tight bidding for a particular commodity-based product. Only the low bid vendor knows that they are indeed the low bid and resultingly is not entering any more price adjustments. If ranking is deployed, vendors can find out if they are 2nd or 3rd etc. and this may entice them to try one more or make multiple more entries if their desire to win the business is strong enough. This is particularly true if the bidding activity has been robust to a point with the low-price indicator switching back and forth between multiple vendors.

It is the deep understanding of markets along with the use of tools like ranking amongst others that are included in strategy reviews with our customers that allows SafeSourcing to regularly exceed customer expectations across all spend areas. Our average annual savings against all categories are more than 24% beyond what you can negotiate on your own.

SafeSourcing is a Procure to Pay SaaS based provider of a number of e-Procurement solutions and associated white glove services that are part of our SaaS offered SafeSourceIt™ eSourcing suite.

For more information, please contact a SafeSourcing Customer Services Associate.

 

 

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You can still improve gross margin and net earnings substantially in this market.

Monday, June 26th, 2023

 

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

Example: Prove me wrong if you think you can!

Assume a $150M Retail Company with industry earnings of just 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 COGS or above the gross margin line spend or roughly $11M. With below industry average savings of only 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.

NO BS Here! If you don’t believe me, I will be glad to personally sit down with your CEO or CFO and Finance team and prove it to you! Imagine what else you could do to earnings if you also attacked your Expense in the same way.

Companies can begin with SafeSourcing almost immediately (SaaS/Cloud offering) with no risk (Cost Neutral Pilots) and no IT involvement at all, why don’t more companies use eProcurement tools. That’s a great question! Probably because they are embarrassed to not already be getting these results.

If this author were you, I just could not ignore this type of opportunity. If you’d like to learn more, please contact a SafeSourcing Customer Services Account Manager. Or me.

We look forward to and appreciate your comments.

 

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Why don’t you use Reverse Auctions?

Friday, June 23rd, 2023

 

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

 Understanding a Reverse Auction according to Investopedia

In a reverse auction, the buyer puts up a request for a required good or service. Sellers then place bids for the amount they are willing to be paid for the good or service, with the winner being the seller prepared to accept the lowest amount.

Reverse auctions gained popularity with the emergence of internet-based online auction tools that enabled multiple sellers to connect with a buyer on a real-time basis. Today, reverse auctions are used by large corporations and government entities as a competitive procurement method for raw materials, supplies, and services like accounting and customer service.

Here’s a real simple truth! If you are not using this tool, you are paying way more than you might think. And your team cannot get anywhere near the pricing that reverse auctions generate. I watched a large company yesterday reduce the cost of any office supply category by 31% beyond what they negotiated.

You can view my comments from an earlier post titled Just what do we mean by eProcurement White Glove Services that supports why our savings average over 24% better than what companies can do on their own most of the time.

SafeSourcing is a Procure to Pay SaaS based provider of a number of e-Procurement solutions and associated white glove services that are part of our SaaS offered SafeSourceIt™ eSourcing suite. That includes our SafeSourceIt™ Global Supplier Database  that includes over 557,000 vendor/suppliers.

To learn more, please contact a SafeSourcing customer services associate.

 

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Specifications?

Wednesday, June 21st, 2023

 

Today’s post is by Margaret Stewart, Director of HR and Administration at SafeSourcing

We all buy things, and we generally look for the best deal we can get, but how do you know you are getting the right thing? Recently a friend tried out a new shopping website and found a great deal on a car jack. This is something that we could all use if we do our own maintenance on cars or just want to be prepared if we need to change a tire. This particular site offered what seem like a reasonable price, much less than you usually see, but not low enough to trigger red flags. So, the car jack was purchased, and they awaited its arrival.

A few weeks later when it arrived, this car jack was approximately three inches high. This was some sort of tiny model of a car jack, and well above the price something like this would seemingly go for. After double checking the website and reviewing the details, this car jack was indeed just three inches high and through some creative photography, no one would be the wiser that it wasn’t full size unless you read the specifications.

There is an important lesson here. You must read specifications carefully to know that what you are purchasing is the right product. This will help you get what you need, but also help you to compare and understand any differences within that category of product. Sometimes by reading about what you think you need; do you discover you may in fact need something else.

This idea goes for sourcing as well. When looking for a product or service, your specifications should be clear and detailed, because otherwise you might get a miniature car jack that only works for small model cars. A procurement partner, like SafeSourcing, can help you come up with the right specifications for the product or service you need and also help to find those that would be a good fit in providing that service of product.

For more information on what the SafeSourcing team can offer you, or on our Risk-Free trial program, please contact a SafeSourcing Customer Service representative. We have an entire team ready to assist you today.

 

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Should Individuals and Company’s be switching to Hybrid vehicles?

Friday, June 16th, 2023

 

Today’s post is by Troy Lowe; Vice President of Development at SafeSourcing.

If you are in the market for a new vehicle and have been paying attention to gas prices lately you may want to investigate an electric or a hybrid.  If you want to stay on the cheaper side you may want to consider the hybrid over the fully electric because they seem to be better value at this time.  A hybrid vehicle can save you on gas because they can get over thirty-five miles per gallon compared to a standard gasoline engine vehicle, which is about a forty percent improvement.  This is done by combining an electric motor with a gasoline engine.   When driving, the vehicle can switch between the electric motor and the gas motor and during some conditions both are used simultaneously.  This results in less gas being used, which gives you a better fuel economy than vehicles that just have a gasoline motor.  The electricity used comes from a high voltage battery pack and does not have to be plugged in to charge because the charging occurs by the gas engine and by capturing energy from deceleration.  Therefor when making long trips you do not have to plan out where you may have to stop to charge the battery unlike a full electric vehicle.  Below are some of the advantages of hybrid vehicles.

  • Lower Fuel Costs
  • Immediate Torque
  • Tax Incentives
  • Lower Emissions
  • Possible Use of HOV Lanes
  • Lack of Idling
  • Value Retention
  • Dependability

If you need help finding new vehicles for your company, feel free to contact SafeSourcing.   We can gather all the necessary information for you and help you decide which product meets your needs.  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.

 

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