Whether you have a shop or an online business, if you are selling items, you will need to purchase and manage an inventory of your goods.
Here are some tips that will help you successfully negotiate with suppliers and freight carriers. All will help you to save money on inventory.
1. Negotiate with suppliers
If you don’t ask you don’t get, so make it a rule to always ask for a discount. Vendors will often agree to anything from 10% to 15% off their wholesale prices, even for low volumes. Also watch out for specials, and even if you miss one, or they are offered at a show that you aren’t intending or able to attend, ask to be charged the special price when you order.
2. Always ask for samples
Unless you have previously bought a specific product, always make a point of asking for one free sample. You can photograph the item for marketing purposes and also test it before you decide to buy – or decide how many items to buy. Online retailers who stock hundreds of products can save a small fortune this way.
3. Don’t foot the bill for returns
Invariably there will be some goods that you will need to return to manufacturers, usually because they are in some way defective. When you first order from a new vendor, make sure you both understand each other. Generally manufacturers pick up the bill for shipping both the defective products back, and the shipping for the replacement item. They should also pay for you to ship the replacement item to your customer.
4. Negotiate favourable terms
Cash flow can make or break any business. So unless you have sufficient spare cash to pay upfront and get a really good discount for doing so, negotiate terms of 30 days, 60 days or even 90 days with your suppliers. If you have a credit card that earns points or rewards, use that to pay.
5. Avoid doing business on busy days
Mondays and Fridays tend to be the busiest days for suppliers, which can lead to distribution errors. Generally you are likely to get improved customer service and accurate deliveries if you order mid-week.
6. Pay invoices early if you can
Some suppliers are willing to give really good discounts to their customers for settling invoices before they are due, or within a set period of time. Having negotiated favourable terms, you can benefit further with additional reductions if you have the ready cash.
7. Take advantage of carrier deals
Large international freight carriers frequently offer their customers equipment deals as an incentive to increase freight volumes. For example companies like FedEx are known to give away computer equipment including PCs and printers and other useful items to their premier clients. If you’re doing big volumes, don’t split the business, but rather push it the way of a company that will give you this type of “reward”. You might be surprised how much you can get for free.
8. Pack your freight sensibly
Freight carriers charge according to actual weight or dimensional weight. For this reason the more compact your parcels are, the less they will cost. Even if you only stock one item, people may order multiple numbers of it, so make sure you have different sized boxes for packaging. This will be a minor investment compared to what you can potentially save in shipping costs.
About the Author
This is a blog post by Neil Jones, Head of Online Marketing For eMobileScan. With 18 sites across Europe they are on track to become one of the largest suppliers of barcode scanner and industrial handheld computers like the newly released Motorola ES400. Specialising if offering companies the tools they need to increase productivity and lower costs.