Lytica’s Post

💲Not getting the prices you want from suppliers? It might be time to review your business terms and conditions. From payment terms to INCO terms and Vendor-Managed Inventory (VMI), contract details play a huge role in your costs. Understanding these elements can lead to better deals and more efficient pricing. We're breaking down the details 👇 https://hubs.ly/Q02LrSSS0

30% or the deal is off 🥲 The smart procurement/finance teams are always going to try sweeten the deal If this happens often, try the following: 1. Always make sure you’re vendor of choice with your primary contact, no beat downs allowed 2. Understand why you’re vendor of choice as this will act as leverage against competitors pricing 3. Ensure your buyer’s financial and procurement team are aware of the reasons why the product is needed 4. Understand any reasoning behind a request for a discount (label, recap, question) 5. Be prepared to trade something of value in return for anything you’re forced to give away (cc Todd Caponi) 6. All changes must be made in one cut, this means no separate conversation for billing terms, get it all on the table at once 7. Ultimately be willing to walk away from a bad deal if they’re asking for too much, if you’ve built the value well enough throughout the deal they’ll chase #negotiation #discounts

I recently worked with a client whose tolling expenses were eating into their margins. After reviewing their production flow, we uncovered inefficiencies in material handling and vendor contracts. By renegotiating tolling agreements and optimizing batch sizes, we reduced costs by up to 15%. This wasn’t a one-off fix—just the start of uncovering more opportunities for savings. If you’re looking to lower your costs, let’s talk.

Free on Board Shipping point or FOB Shipping assigns the liability and the payment for a shipment to the buyer. The transfer of responsibility occurs as soon as the inventory arrives at the shipping point and gets loaded into the vehicle. After the transfer, the buyer logs the transaction as a sale and notes the increase in their inventory. The buyer pays for all shipping costs with FOB shipping. Aside from the transport expense, they are also liable for any damages that may occur during shipping. In this agreement, buyers are responsible for filing claims on damaged freight since they hold the title and ownership of the inventory. For instance, when Retailer A signs a FOB shipment agreement with International Manufacturer B for inventory, the inventory ownership transfers once the shipment reaches the delivery vehicle. In most international transactions, the differentiation is usually at a port. If one piece of inventory breaks during transport, Retailer A is responsible for the damages even if the parcels haven’t reached their storage facility. 📌And more on (zhenhub.com) web 📌https://lnkd.in/eQddmWAw

Here's a sobering statistic: the average supplier purchase order takes 10 separate receipts and a whopping 100 days to close. This drawn-out process is surprisingly common with distributors and wholesalers. Aside from the added time and motion in your warehouse and customer-impacting delays, this increases the potential for errors, complicates reconciliation efforts, and can even strain relationships with suppliers. There's a clear opportunity for improvement in how we manage purchase orders, focusing on strategies that promote both efficiency and accuracy.

Here's a sobering statistic: the average supplier purchase order takes 10 separate receipts and a whopping 100 days to close. This drawn-out process is surprisingly common with distributors and wholesalers. Aside from the added time and motion in your warehouse and customer-impacting delays, this increases the potential for errors, complicates reconciliation efforts, and can even strain relationships with suppliers. There's a clear opportunity for improvement in how we manage purchase orders, focusing on strategies that promote both efficiency and accuracy.

Payment terms can be a contentious point between supplier and customer.     I remember as a buyer having long conversations with my suppliers about why our payment term had to be 90 days or ideally even longer.   CAPS prepared an interesting overview of the most commonly used payment terms in the manufacturing and services sector these days.     What are your experiences negotiating payment terms on the seller or buyer side?    What do you consider a fair payment term?   Let’s have a conversation and build bridges between procurement and sales. --------------- I build bridges between #procurement and #sales – one brick at a time. 🥇 I train sales and procurement professionals to unleash their customer-centricity mindset.

A shortage of material due to a supplier conflict This often happens when disagreements arise over pricing, delivery schedules, or quality standards, leading to delays in production and potential impacts on customer satisfaction. Here are some steps to manage and mitigate such a situation: 1. Identify Alternative Suppliers: If feasible, have backup suppliers in place to avoid over-reliance on a single provider. 2. Negotiate with the Supplier: Attempt to resolve conflicts by discussing mutual concerns and finding a middle ground on pricing, delivery schedules, or quality expectations. 3.Evaluate Internal Inventory: Check current inventory levels to determine if there’s enough material to cover the shortfall temporarily. 4. Increase Lead Times: Adjust your production timelines and communicate new lead times to customers if delays are inevitable. 5. Diversify Supply Sources; Long-term, consider diversifying suppliers to reduce the impact of conflicts with any single provider. 6. Strengthen Contracts: When feasible, include clauses that mandate penalties for non-performance and incentives for timely deliveries in contracts with suppliers. A proactive approach, emphasizing good supplier relationships and contingency planning, can mitigate the impact of future conflicts.

Tired of unpredictable packaging costs? Our Impact Program's "Price Lock Promise" offers you superior pricing on packaging supplies, locked in for 90-180 days, thanks to our precise forecasting. Learn more about the program - which guarantees double digit impact to your bottom line - here: https://hubs.ly/Q02TkyWf0

Understanding and leveraging Minimum Order Quantity (MOQ) price breaks can be a game-changer for your business. Here are three key benefits of purchasing in larger quantities: 1️⃣ Cost Reduction: Purchasing in bulk allows companies to significantly lower the cost per unit, leading to improved profit margins. Every penny counts! 2️⃣ Increased Competitiveness: With lower procurement costs, you can offer more competitive pricing to your customers, enhancing your market positioning and attracting more buyers. 3️⃣ Resource Optimization: Meeting MOQ requirements means more efficient use of storage space and resources, streamlining your operations and reducing waste. Don’t miss out on the opportunity to boost your bottom line! 💰✨ #SupplyChain #Procurement #BusinessGrowth #MOQs #CostSavings