Compounding events within the past two years including shipping crises, labor constraints, supply shortages, demand increases, and most recently, climbing interest rates has carefully designed a recipe for price hikes across the entire length of the supply chain.
In an inflationary environment, it's important to keep a close eye on your company's expenses. One area where costs can quickly spiral out of control is with your suppliers. This can be seen as an opportunity, however for companies to take a closer look at business operations.
Here are five ways to keep supplier costs under control in an inflationary environment:
1. Review your contracts regularly
When prices are rising, it's important to review your contracts regularly to make sure that you're still getting the best possible deal. If you find that prices have gone up significantly since you last negotiated your contract, don't be afraid to renegotiate for better terms.
2. Shop around
It pays to shop around for the best deals on supplies and services. Don't be afraid to ask for quotes from multiple suppliers to ensure that you're getting the best possible price.
3. Take advantage of discounts Many suppliers offer discounts for early payment or bulk orders. In an inflationary environment, it's important to take advantage of these discounts whenever possible to lower your overall costs.
4. Negotiate terms and conditions
In an inflationary environment, it's important to be flexible with your supplier terms and conditions. If you're able to negotiate longer payment terms, for example, you'll be able to take advantage of lower interest rates and avoid costly late fees.
5. Review your invoices carefully
It's also important to review your invoices carefully to ensure that you're not being overcharged. If you find any discrepancies, don't be afraid to ask for a refund or credit.
By following these tips, you can help keep your supplier costs under control in an inflationary environment.