Part 1 of a 2 part series

Warning Signs:

• Decreased gross margin.
• Increased cost of goods sold.
• Significant adverse deviations from budget.
• Significant increase in a particular line item's cost.

Steps to Improve: BUY RIGHT & SAVE

• Buying right is better than a sales increase; negotiate special discount deals.
• Comparison shop supply prices.
• Get competitive bids.
• Shop around; bulk purchase discounts; annual totals.
• Be ready to change suppliers, brands; loyalty is a two-way street.
• Negotiate well; payment terms, storage, price, shipment.
• Buy in volume for discounts.
• Take advantage of purchase discounts.
• Take advantage of prompt payment discounts.
• Track lost purchase discounts.
• Opportunity buy; buy when unusually good deals are available.
• Scale back orders but pounce on deals.
• Buy from or near prime source; cut out middlemen.
• Buy directly from manufacturers.
• Find unusual sources; use scrap/remnants, new ways to do things.
• Insist on timely delivery.
• Insist on good quality products.
• Periodically review available alternatives for major expense items.
• Rate key suppliers on cost, quality, and delivery and let them know.