Product/Service Acquisition Decisions Are Made At Multiple Locations By Multiple Team Members

Regardless of how good the expense category manager is at negotiating price, vendors always price their product/service based upon the volume purchased or purchase potential of an account.

When a company uses a decentralized purchasing process, they’ve changed their profile appearance from the company size they actually are as a whole to the size of one of their remote offices.

This situation gets further exaggerated when there are remote offices throughout different geographical locations and purchasing managers are using multiple vendors.

Your company is costing itself profit dollars by presenting itself to vendors as smaller than you actually are. In addition, there’s the appearance of having less purchase volume potential than you do.

There may be some products/services that can be acquired regionally without much impact. Typically, it’s far more profitable for your company to use one vendor per expense category and to manage that relationship through one central point in your company.

Next week…Reason # 17