In this article we will talk about:
- 3 Essential Pricing Rules
- What kind of company should do purchasing management?
- How to make a well-priced quote on your purchasing management
- Worksheet ready for your purchasing management
Purchasing management, although it seems an exclusive term for large companies, is present in any business, no matter the type, size and quantity of people who work on it. The truth is that all companies need to make purchases in their day to day and knowing the essential rules on price quote can save you a lot of money.
Basically, if you remember these 3 rules every time you make a new purchase, you're sure to be able to optimize that process within your area or company:
- Rule 1 - Never accept the first price - After receiving a first quote, negotiate with the company, ask for discounts and see what the best price can be offered. See if payment terms (the view, cash, etc.) influence the price. If the price does not agree with the desired one and it becomes impracticable to buy from that supplier, look for other companies.
- Rule 2 - Always make at least 3 quotations - This is the minimum search pattern that should be applied to any company. If you accept the purchase always from the first supplier you will probably be losing money and the opportunity to know better and / or cheaper suppliers.
- 3 Rule - Do not get trapped - If you are 100% dependent on any vendor you may be in a stolen. To begin with, by relying on a single vendor, you may have the false sense that it will solve everything for you. If on the one hand, this may be true, on the other hand, if that company has any problem, it is you who can harm yourself. Therefore, always have a list of other suppliers that can help you in difficult or problematic situations.
Now, one doubt you may have been left is whether it is worth even if you do your shopping management, after all, you can work alone, have a small business or do not have a very large amount of purchases.
In my opinion, any company can take advantage of good purchasing management. But to confirm what I'm talking about, let's see some business cases that can enjoy a good purchasing management worksheet:
- Reseller - in the example below, of sports materials
- Restaurant - with purchases in supermarkets, food and beverage distributions, etc.
- Farmácia - with pharmacists and commercial representatives of
- Travel agency - with operators or directly negotiating with suppliers of tourist services
Anyway, I think you can understand that even small companies have to make purchases on a daily basis and, regardless of their type of supplier, it is possible to quote prices and negotiate values, deadlines and forms of payment.
Visualize your business and think about the purchases and expenses that you carry out throughout the year, however simple it may seem, will have some expense that can be reduced if you do your job of price quotation well within a structured process of management.
Now that you have understood that the management of purchases is for any company, I will show the best tactics to make a good price quote. For teaching purposes, I will continue to use the example of a sports materials retailer to understand how to make price quotes within your purchasing management.
- Step 1 - Define exactly the materials you want to buy:
In our case, let's assume that we want to buy shoes
- 2 Step - Pricing with at least 3 suppliers:
In addition to calling the supplier and understanding the price, it is worth already raising possible payment methods, delivery deadline, analyze complaints and quality of your material (if possible). In our purchasing management worksheet, you can register the product, the quantity, the month of the quotation, the responsible official, as well as the values and deadlines:
- Step 3 - See which are the best suppliers by following your own criteria:
In our spreadsheet, we have already sorted out which vendors have the best price and term offer, but it may be that you give more value to quality or another item. If this is the case, follow the criteria of your business.
- Step 4 - Negotiate:
Before choosing who will be your supplier, start to the stage of negotiation of values, payment terms and delivery. At this point, you can see possibilities in case of cash payment or the maximum amount of installments that can be made for the purchase. In addition, it is worth trying to discount for large volumes (if it is your case) or agility in delivery.
- Step 5 - Make the purchase with the supplier that had the best quote:
That's it, if you already traded, it sure weighed who had the best offer and just need to buy. In our spreadsheet, the purchase register is done month by month, allowing a close monitoring of all your orders:
- Step 6 - Review your monthly results:
To close a good price quotation process and choose the best supplier within the conduct of a good management of purchases, it is worth only you to monitor your spending with purchases and analyze if everything is within your monthly budget.
If you are, excellent, if you do not rethink your future expenditures so that you do not have any damage or unnecessary materials.
The possibility of good management of purchases does not always depend only on the good will of the managers responsible for the purchases. Sometimes a tracking tool can help you track and track purchases. If this is your case, please indicate our purchasing management worksheet.