Evaluating Vendors & Suppliers – Cost Competitiveness

In this series, we’ve asked you to take a good look at your vendors to determine if the relationship is optimal. Quality and Customer Service were the first two areas we looked at, and this week, we will explore Cost Competitiveness.

No one likes overpaying, even for top quality products and services. How do you know you are getting a good product at a good price from your vendor? Here are a few ways to make that determination.

Cost Analysis

A cost analysis might be in order, including a comparison to competing vendors for a fair assessment of what you are paying. Just make sure you are comparing apples to apples. For instance, if your current vendor offers added value services as part of their product package, you may need to take that into account.

Budget Awareness

Sometimes, merely setting the bar for your vendors in terms of costs puts them to the test. They should understand what your budget parameters are at all times as this encourages finding ways to save and maybe even reprioritize what they do and how they do it for you.

Proactive Cost Cutting

Awareness of changing industry trends coupled with an understanding of your budget will allow a vendor to identify areas they may be able to cut costs. For instance, in our line of work, BrandPOP regularly samples new material options comparable to what clients currently use in order to bring cost saving alternatives to the table. This is especially useful when costs fluctuate on materials.

Good vendors understand if you act in good faith, providing a great product at a fair price, the revenue potential will follow. Don’t hesitate to approach the subject of cost consciousness with the same common sense as any other area you deem important.