Buying Wisely

It is important for any business to ‘buy wisely’, keeping costs down keeps profits up. To be able to buy wisely the following tasks should be undertaken:

Research. Find as many suppliers of the item you want as you can.
Get quotes. Make all suppliers quote not only on price, but also on terms and conditions – make them compete with each other.
Quotations in writing. If possible get all quotations in writing or by email. If you get quotes over the telephone, get them to also write, fax or email them to you. This will avoid any misunderstandings later.
Analyse quotes by putting them in a spreadsheet model, it may be that the cheapest is not the best deal overall. But this operation will put you in a better bargaining position by being able to go to the one you prefer on service and getting them to at least match if not better the cheapest found.
Place the order. Whether you email, fax or post, it is usually always better to place an order in writing, even if you telephone through an order also confirm that you are sending a written confirmation. This will then form your contract with the supplier and avoid any misunderstandings later.

Other things to watch out for when buying include:

Don’t go to the first company on the list
Don’t be sucked in by offers - they may not be as good as they look
Don’t be panicked into buying right now take time to make the decision
Negotiate or barter a good price with good terms.

It doesn’t matter what the business is buying whether it be a pen, camera or even an aeroplane keeping in mind the items listed here, will make you a better buyer and save money for the business in the long run, as well of course as increasing profits.

Another good tip especially for start-up businesses, but could also be good practice for established businesses, particularly when buying online, is to buy on credit card. Some credit card companies do offer credit cards to businesses, there is usually an annual fee, but beyond this the cards operate exactly the same way as personal cards. It is also possible to have credit cards issued to staff members, all card holders will share the same credit limit, but it does allow staff members to incur agreed expenses. Using this method of payment not only gives an additional record for accounting purposes, but also offers some protection if the goods are not delivered.