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

Does your company include advertising allowances in your product costs?

An advertising allowances is a fund allocated by the provider to be paid to a merchant for the purpose of advertising a specific product or brand. The advertising allowances could be in the form of either a discount from the wholesale price of a product or a reimbursement to the merchant for advertising costs which have already incurred.

Let’s face it, when sourcing your for resale products, having all costs associated with that product make life much easier for your procurement department or your third-party SaaS partner like SafeSourcing Inc.

Finding out that you have an advertising allowance after you have sourced something creates huge issues. Let’s say that your current vendor embeds those discounts in the up-front product cost and not as a payment at the end of the quarter or year. While it may be a net-net benefit, it is accounted for differently. Management may be looking for that payment only to find out it is now included in your current cost. Oops!

At SafeSourcing we have a list of questions that are part of our white glove services that we ask and document the answers to that allows us to uncover everything that is included in your current contract language and where there are potential surprises in your P&L.

If you’d like to learn more about how SafeSourcing can assist in properly analyzing the total cost of your  annual purchases, please contact a SafeSourcing customer services associate.

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

The Judgmental Forecasting Technique involves the use of opinion, experience, and judgment; and is often used when there is little information about a specific set of circumstances. It is usually defined as that which uses instinct along with other resources to predict what may happen. Executive decisions can be made on the bases of these feelings. It goes beyond purely statistical techniques and encompasses what people believe is going to happen. It is in the realm of intuition, interdepartmental committees, market research, and executive opinion.

I call this seat of your pants forecasting, and it is often what gets companies into trouble and aggravates their customers. Generally, this results from what historically were small business that grew too fast and had not yet acquired technology to support their forecasting. You often hear comments in an environment like this such as I’ve been at this for years, and we know what we are doing? Unfortunately, this practice is still widespread today.

If you’d like to learn more about how SafeSourcing can assist in properly sourcing to support your annual purchases, please contact a SafeSourcing customer services associate.

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

Throughout nearly every industry this year and even stemming back the last two years, we have seen prices rise. Much of these cost increases have been attributed to inflation and the rising cost of goods. However, with nearly every good being more expensive, how are companies pulling in record profits? Does the extra money paid at the store works its way up the line through the supply chain and eventually settle somewhere? Based on the profits a few people have made over the last two years, most profits have worked their way up to the top and into the hands of only a select few (Bezos, Musk, etc.).

There are some companies that do not fit that model, thankfully. One such company, Gravity Payments, has been among the few outspoken companies criticizing other companies for lack of pay and wealth distribution. You may recall in 2015, Gravity Payments founder Dan Price decided to forfeit much of his own salary and raised everyone else’s pay up to a minimum of $70k per year. That move put a spotlight on the company and has helped garner positive media attention and associated sales and has also improved employee retention and productivity.

In stark contrast, companies like Amazon who have been forced to pay more for their hourly employees and are currently undermining and fighting unionization attempts, has seem huge corporate profits for the few top people and has gained a vast amount of negative press and is often thought of as a terrible company and workplace. Amazon, when faced with rising costs of employment, however, did not rise to the challenge of cutting CEO pay to pay for workers. It instead raised prices for the consumers. Even Dan Price has said that even if you are giving your employees a 5% raise every year, those employees are ultimately receiving a pay cut due to inflation and the higher costs of goods.

While the costs of labor are rising, companies must work hard to keep up – not only with the rising cost of their own internal labor, but also that of the products and services they use. SafeSourcing can help your organization find the vendors that fit the needs of what you are looking for and help offset rising expenses.

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

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

Well, if you have not heard we have another product that is rising in price and will continue rise into the near future.  This time it has nothing to do with Covid-19 or the rising inflation.  The wholesale price for eggs is reaching historical highs just in time for Easter and Passover.  This rise is being caused by a highly infectious avian flu that has swept across more than half of the country so far.  Because this flu is so highly contagious and deadly to birds, it is forcing farmers across the country to kill millions of the egg laying birds.  So of course, a lack of birds means a lack of eggs which intern causes prices to rise as the shortage of birds continues.  So far, we are seeing the prices of large eggs from the Midwest are approximately three times higher than last year at this time.  The price of the eggs is now reaching around three dollars a dozen and according to researchers this has only happened one other time.  So far, the flu outbreak has been detected in almost thirty states.  According to some experts the price may not go to much higher because retailers will often take a loss on products like eggs to bring in more traffic into their stores.  The good news is that the bird flu is only affecting our pockets for now and should not affect our health.  According to researchers this type of flu is rarely transmitted to humans.  So, we only need to be concerned with rising costs until this passes.

Interested in learning how SafeSourcing can help your company save money during these and other shortages?  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.

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

For too long now, we have been experiencing a seller’s market and many organizations’ buyers have had to suffer through price increase after price increase. At SafeSourcing, we have talked with buyers that have reported continuous price increases every month and year-over-year price increases that add up to paying nearly 100% more from one year to the next for the same products.

The question is then is – when will this situation change?

We are noticing that a change is already taking place. The list of categories below is just a sample of the categories that we have sourced for our customers recently. What is interesting about this sample is that the average savings for the categories listed here is over 33%.

• Windows and Doors – 14% savings
• Labels – 32% savings 
• Towels and Wipes – 64% savings 
• Appliances – 16%
• Cappuccino, Tea, and Hot Chocolate – 27% savings 
• Concrete and Pump Cleaner – 64% savings
• Hot Dogs – 24% reduction
• Cigarette racks – 27% reduction 
• Napkins – 56% reduction plus an increase in quality 
• Refrigeration equipment – 31% reduction 
• Creamer etc. – 20% reduction 
• Waste removal – 24% reduction

 Another signal of a change in the markets is that we have seen an increase in the number of vendor participants in RFQs. That increase directly corresponds to a decrease in the number of vendors that are declining citing challenges such as capacity limitations.

For those that are watching closely, the opportunity to claw back against the recent price increases is right in front of you. For those that listen to your vendors, expect the price increases to continue.

For more information, please contact SafeSourcing.