Business buyers need to take action now before the present sluggish economy improves. Prices for most pa..." />
Act Before the Economy ImprovesDate: 08/01/2012
Business buyers need to take action now before the present sluggish economy improves. Prices for most parts have been rather stable. Many of the various government price indices show very small increases, in the neighborhood of one percent, and a great many others show actual decreases in their product category indices.
This will not last. As business picks up speed, higher inflation rates will return. Up until now suppliers have curtailed price increases in spite of lower profits, but with more sales they will announce higher prices. Buyers will have little time to negotiate because they will be under pressure to get material to fill their own company’s orders.
Smart buyers will begin asking for price reductions and for other ways to reduce costs from suppliers. Lower prices for one time buys should be fairly easy. Bigger savings may be possible for fixed price long-term contracts.
Get your savings now; any increases in the months ahead will have a smaller effect because they will be based on the present lower cost you obtain.
Shop other suppliers if your present suppliers at first seem inflexible. There are hungry vendors out there anxious for business. Don’t be afraid to let your present suppliers know you are obtaining quotes in the marketplace. There can be various reactions. One is they may be more amenable to negotiating, or they can just wait to see if you get a better deal and hope to match it. They may try to convince you how much better their product or service is than others and warn you of the risk you would be taking by changing sources.
However, there are a few caveats you should be aware of. Some suppliers are in such shaky condition that your action may have them decide to go out of business. You must judge their situation and what your options are, but don’t be intimidated if the facts look different than what they say. In most cases there are other sources and they could be better than what you have.
Doing nothing now is not without risks. You may have missed a golden opportunity if prices start to rise sharply.