Purchasing? Hiring an expert? I can do all that myself. Or can I?
They seem like very simple tasks at first sight. But if it were all that simple, we wouldn't see the large price differences for the same services or products that we see today. In reality, things go very differently.
The difference between a well-negotiated price and a non-negotiated price can amount to more than 50%.
In other words: you're then subsidizing your supplier at your own expense. And that's quite masochistic, isn't it?
Negotiating is Harder Than You Think
Yet someone who pays twice too much still thinks they've negotiated the best price. A well-trained salesman or saleswoman will do everything to give you the impression that you really have the very best deal. Even though it's still about 50% too expensive.
So you're not fighting with the same weapons, only you don't realize it. The result is that you're stuck again for years and years with a far too expensive contract and that money is leaking out of your organization year after year.
The good news is that there are companies (like Buyology of course) that help you negotiate the price and conditions of suppliers one by one.
Impact on Your Profit
What impact does this have on my profit now, you wonder? Revenue is the most important thing after all!
About 35% of an average company's revenue goes to external suppliers. Another 35% goes to personnel costs. 15% goes to other costs, and the remaining 15% is profit.
Now suppose you improve that 35% cost for suppliers by 5% across the board. That's really not that ambitious and easily achievable. That gives you a direct impact on your EBIT of no less than +11.6%.
And that without generating a single euro of extra revenue. Quite a nice result, isn't it?
And if you can also combine that with revenue growth, then the sky's the limit.
If you don't have the necessary expertise in-house yourself, you can always call on a partner with the necessary expertise. Like Buyology, for example.