Saving money is always top of mind awareness to any business owner no matter if you are a start-up or a large corporate entity. You go through your bookkeeping with your accountant and look for ways to streamline your business, saving as you go. One of your bigger costs may be purchasing goods from suppliers. Most suppliers will offer discounts for cash on delivery or early payments. They may offer discounts for bulk or larger purchases. How can you take advantage of those discounts?
Here are several additional ways you can get a better discount out of your vendors:
1. Take advantage of early payment discounts with factor financing
In an article for the American Express, contributor Julie Rains wrote that paying early can be a great way to get a discount out of a vendor. Most – if not all – want their money as soon as possible, so offering to pay right away can open up some favorable opportunities (in many industries offering an early payment discount is a standard practice). This will require calculations on your part to determine if the upfront costs are worth the long-term savings, such as exploring Factor Financing.
You have used factoring for your accounts receivable. Have you considered how you can use factoring to save you more money?
If your suppliers offered a discount of 3 – 5% or more for early payment or cash on delivery but you were able to secure factor financing for less than that, you would pocket the difference. A wise business decision!
With rising costs of supplies, you may even save more if you bought in bulk before pricing went up. That would be considered a win – win situation with you not only having supplies on hand but supplies on hand at a cheaper cost to you!
You could go out and pursue more clients with your extra supplies and create even more business. Is that a win – win – win situation?
Isn’t it time you enjoyed a good win?
2. Join the club
There are a number of membership associations, clubs or groups that cater to the needs of small businesses. Rains explained that having these relationships in place can lead to even more discounts. Check around – you could be saving money on office supplies, shipping costs and other expenses, all by using the proper membership card on purchase.
It doesn’t take a lot to join these associations, either. Their websites often have rules to sign up. Often, you don’t have to be in a niche market to go this route. However, there are also opportunities for woman-owned businesses, veteran-owned companies and businesses serving underprivileged areas or markets.
3. Attempt to negotiate
In many cases, discounts are advertised up front. However, there are some that you can get by simply being a strong negotiator. Rains suggested talking with individual vendors about possible deals. It is rarely a bad idea to ask around to see if there are any savings available.
Don’t just hone in on price, either. Negotiate over items like shipping schedules. Vendors may be willing to offer a discount if you plan your deliveries around their slower times of year, or when they can dodge costly shipping charges. Think from a vendor’s perspective in order to find the best discounts.
Often these discounts are available simply by asking about them. As a small business owner, you should always be on the lookout for opportunities to cut your costs and grow your business—taking advantage of the discounts offered by vendors could really be low-hanging fruit.
To learn more about saving money in your growing business, call us today, we believe in helping you win!
Email – talley@ providentcfllc.com
Phone (423) 661 - 3900