Tips for Quick and Effective Cost Savings Opportunities

Whether you are a business customer or retail consumer, there can be many considerations when sourcing a product or service that not only delay your decision of who to buy from but when to buy. However, there can be situations that come up mandating a more immediate purchase. For example, your contract is expiring and you do not want to default to high cost “rack rates” or, there is a big sale happening and you MUST get that dress you wanted before your size and color preference is gone. Therefore, I have identified a few tips and examples to help assess and identify the best way to make a quick decision that should produce a financially favorable outcome for your business or shopping pleasures.

1.Confirm what you have versus what you need - Do a quick inventory check to see if a product or service is actually being used and is needed.

• Example: Telecommunications – if you are looking to renew phone services with a supplier that typically warrants a contractual commitment, take a look at the phone numbers billing today and see if you can determine if the lines are in use, are published anywhere, or can be disconnected. A quick rationalization run through can result in immediate terminations and savings without doing much work. Depending on the depth or your inventory, a more formalized timely review might be necessary but a quick check could lead to immediate opportunities.

• Example: Closet Check – how many button down shirts or jeans do you own from the Gap? Do they fit? Do you have a need for something new or more business chic? You might not have taken that deep dive into your closet from some time and could either find that 1990’s neon striped shirt you NEVER wear or realize your little black dress has now faded to a washed out noir color and there are some new clients to visit in upcoming weeks.

2.Do your research - What are the latest market trends and is competition on the rise.

• Example: Office Supplies – how are businesses shifting their purchase of office supply products and how are they leveraging suppliers to consolidate “other” administrative expenses such as furniture, equipment, and supplies? Consider looking at alternate solutions than the most obvious based on your actual needs; possibly consider Amazon vs a Staples or Office Depot.  If you do not need global support and volumes are low, find out who provides supplies to local businesses and asses pricing from more regionalize suppliers. Sometimes the bigger players want commitments to offset aggressive pricing and it may not be necessary based on your actual demand.

• Example: Diapers – having a non-potty trained 3-year-old has taught me to source EVERYTHING from diapers to toddler clothes. Before I would buy formula and diapers from the supermarket, Walmart, or Babies"R"Us. Now I buy most items on Amazon through their subscription service where I pay not only an already discounted price but even lower pricing for auto shipments…and yes these are recurring requirements. I continue to spot check the market to see if there are any shifts in pricing on my recurring purchases or find out what other moms are doing to save a buck here and there.

3.Everything is negotiable – if you just ask the question. Being direct with suppliers or retailers can produce a lot of value in understanding more about the service/product you are purchasing but can also offer an opportunity to get it a lower cost.

• Example: Telecommunications – while looking to reduce inventory as discussed above, you should also understand what all of the associated costs on your bill are for, if they are necessary, and if there is room for improvement. You will have to pay for the monthly phone service itself but what about those hefty ancillary costs that can equal up to 50% of the total monthly service cost. Is the supplier mandated by the state or FCC to charge this fee and if so to what extent? Are other suppliers doing it differently allowing you to leverage other rates for negotiations? What about newer technologies available that provide more efficient service and allow for deeper discounts as suppliers are looking to sunset older legacy technologies. Lean on your supplier a little for feedback and recommendations.

• Example: Price Check – last week I bought an expensive shirt from the Gap in-store. This week there is a sale for buy one get one 50% off. I wanted the same shirt in a different color but did not want to buy anything else, so this was not that great of a deal for me. However, I checked online and saw that same shirt was on sale for 40% off…on a single item. Typically you have to buy one way or the other so I just asked the store manager to match the online price and they did. Some stores will price match not only their own online pricing but competitors pricing, like Amazon online deals…you just need to ask the question.

So what do the above tips all have in common? Spending time doing your due diligence can produce a refined and “cleaner” inventory, encourage an engagement with suppliers/retailers to help in decision making, and allow for a successful cost effective purchase. Never be afraid to ask for help or see what is hiding in your closet. You never know, 90’s fashion could make a big comeback!!