We asked our customers for tips on how they got better prices from their suppliers. Here’s what they came up with.
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Early payment discount
A lot of companies offer discounted prices for early payment. The terms of early payment are usually stated on the invoice. If not clearly stated, ask your supplier to provide a price quote for an early payment. Early payment discounts vary, but you can expect to get a 2-10% discount for an invoice paid within the first 10 days of its issuance.
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Large order discount
Consider ordering in bulk to get a lower price per unit. If you have the cash, you can afford to order more at a lower price. This will help improve your margin as you can save anywhere from 5% to 20% depending on the goods. If ordering in bulk is not reasonable, consider reducing the frequency of your orders, for example, from 4 orders per quarter to 3, to lower transport costs.
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Subscription discounts
If you’re using licensed software on a monthly plan, consider switching to an annual plan. This works just as well with magazines, websites and other subscription based services. The savings vary, but you can expect to save at least 10-20%, sometimes even 50%. Doing this will keep your costs down and increase profits.
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Restocking before price increases
Year-end is the perfect time to think about restocking, because January 1st will bring with it not just a new year, but new prices as well. To take advantage of the situation, you should think about restocking before the new year. Stocking up on goods with 2016 prices allows you to keep your prices lower for longer. This will give you an advantage over your competitors. If your customers are not price sensitive, you can increase your margins.
What if you don’t have the money?
Find out how Investly can help you unlock cash in your invoices. We’re cheaper, faster and more flexible than banks. Get a free account now, you pay nothing until you’ve financed an invoice with us.