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Hackernoon logo4 Ways to Boost Your Buying Power by@readwrite

4 Ways to Boost Your Buying Power

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@readwriteReadWrite

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For most businesses, “buying power” is a phrase reserved primarily for customers. In today’s ecosystem, however, each company is as much a buyer as it is a seller — and yours is no exception. Heading a successful organization is never cheap, so the more bang you can get for your buck the better. 

For a company like yours, boosting your buying power means being able to get more of the goods you need at price points that work for you. There’s no single way of going about this, and the right answers will look different for each industry. With that being said, there are a few potential jumping-off points all business leaders should be aware of, such as:

1. Join a group purchasing organization. 

Becoming a buyer means feeling the “small” in “small business” more acutely than ever before. Big vendors are less willing to go out of their way and cut deals for companies your size, and one of the best ways to get a lot bigger in their eyes is by joining a group purchasing organization

Group purchasing organizations, or GPOs, combine the buying power of many small companies into a quasi-conglomerated purchaser, allowing you to get deals generally reserved for only the biggest of operators. The benefits don’t just stop at pricing, either: with the added buying power of a GPO, niche requests or custom orders are far more likely to be successful than they would otherwise. There aren’t many ways to give your buying power an instant shot in the arm, but joining the right GPO may just be one of them. 

2. Use purchasing analytics.

If you’re trying to make the most out of your existing level of buying power, you need to be smart with it. Using software or applications to find the exact right deals for your business is an absolute must in today’s economy. Procurement analytics may not sound like the most accessible way to boost buying power, but they’re one that all businesses should take seriously regardless.

Almost every aspect of the purchasing process can be bolstered by judicious use of analytics tools. Looking for new vendors? Use a platform that allows you to search for one that offers the right goods at the right prices. Negotiating contracts? Find software that can extract contract data to help you understand your business’s position. From distribution to sustainability and everything in between, each piece of the procurement puzzle stands to be boosted by analytics. 

3. Buy with foresight.

If you can’t be a big business, you might as well buy like one. By timing and planning your company’s purchases properly, you can make purchases of a size and magnitude that will catch the attention of even the largest vendors. Buying in bulk may not work for all businesses all the time, but making a plan for your purchases can help you achieve the right level of buying power at the right time. 

Take stock of your historical purchasing patterns. Are there any cyclical buys that you could consolidate into larger purchases made with less frequency? The bigger the order, the more room you have to negotiate to your benefit. Have you made any one-off purchases that it turned out you need to make again? Always do everything you can to order the right size the first time — vendors will be more accommodating in the future if your first purchase was a large one. Thinking ahead and thinking big when you buy can help consolidate your buying power, even if your expenses remain unchanged. 

4. Form buying partnerships.

If joining a GPO or buying in large amounts simply isn’t in the cards for your company, then enlist other business to your benefit. Whether they’re local partners or nationwide competitors, companies that buy similarly to yours may be interested in doing partnered purchasing. Forming your own purchasing group may not get you the reach that a GPO could, but doing so could still increase your buying power to levels you could not have achieved otherwise.

There’s no wrong way to form a buying partnership, nor is there a wrong company to form one with. Whoever can help your company get the products you need cheaply is a potential partner, and be sure to leave no options on the table when it comes to looking for businesses to get in league with. 

Now more than ever, it pays to be able to procure precisely and cheaply. By investing in your buying power now, you’re strengthening the operating potential of your company indefinitely.

Image credit: Pexels

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