Evaluating your Spend

Every business should have a clear understanding on their operating costs and should be constantly evaluating this spend regardless of size or how big your company is. What does it mean to be evaluating your spend? If you asked your accounting department to provide a list of the top 20% of vendors in relation to how much money you spend with them annually, this would be a start. This list of suppliers will represent close to 80% of your operating budget. I know, the pareto principle is overused but in this instance is 100% on point.

Prudent business owners will dedicate a large portion of their time or their purchasing department’s time on analyzing this 80% cost. These are your target vendors and where you need to focus your efforts. Requesting price concessions for your guaranteed or long term business and suggesting that they partner with you on productivity improvements are two quick solutions you can key in on.

There are multiple ways to approach this:
1. First drill down and gather specific details on this spend. How many widgets am I buying of a specific product in a 12 month period? This is known as your annual usage. What is our cost to procure these items? Is there a better quality product which will perform the same function and reduce operating costs? Are there like vendors that can provide a similar material or service?

2. Approach your existing vendor directly or by way of a RFQ and request firm pricing for a 12 or 24 month period. In exchange for this commitment, you are expecting preferred pricing. This does two things, stabilizes your costs for the next 12 – 24 months and reduces ordering costs as these commodities can be covered by a contract or supply agreement.

3. Creating competition is the best way to achieve fair market pricing for goods and services. To achieve this, you need to issue a Request for Quotation (RFQ) for the above item(s). If your spend warrants, you should do your homework and pre-qualify vendors for these items. Ensure they are of similar quality by asking for samples and get a sense whether these suppliers can meet price and delivery timelines based on your usage or existing requirements. No use buying something for 10% less than what you are presently paying if the new vendor cannot deliver!

4. It gives the vendor comfort knowing they have your business for the next 12 months in exchange for better pricing. By granting them a contract for the next year, the expectation is the vendor would guarantee they carry relevant inventory in their local branch which would then allow you to reduce on-hand inventory. In this instance you are reducing carrying cost, cash outlay for inventory and achieving a reduction in unit costs. Savings all the way around!

Issuing a RFQ (Request for Quote) to determine present market pricing is always the preferred way of doing business. It is ethical, transparent and begins to condition your suppliers of your intention on monitoring your spend. It sends the message that your company is focused on ensuring you are receiving the best possible product at the best possible price.

If creating a RFQ to help manage costs is on your radar, there are many sample RFQ templates available on-line or the team at RFQPro would love to help you get the ball rolling.

See a list of our templates and forms by visiting our In the Pack Page

Here is to your success — Mark.

How our Quotation Forms can Help

Creating a procurement form from scratch is not in every business manager’s top 20 list of items they want to be doing at work each day. For most of us, it is not even in the top 100! Purchasing people are results oriented…they want to be reporting to management on $ savings, contracts, trends and not that they spent their day writing a tender.  The RFQ and other procurement related forms are important and do require an attention to detail. Is there an easier way to accomplish this task so you can spend your time on more fruitful projects?

At RFQPro.com we supply sample Procurement Templates for a variety of potential quotation requirements and this is how our quotation forms can help you in your day to day tasks.

Here is a link to the list of some of the forms we offer: https://www.rfqpro.com/pack-breakdown

In this list you will notice we provide both generic and specific types of tender documents which can be used [Read more…]

RFQ and RFP Template Packs

RFQ and RFP Template Packs:

save_money Most of our readers are aware the RFQ and RFP Template Packs you see in the margin have been subsidized by the company in order to encourage our viewers to subscribe to the release of our newly launched RFQ Software. If you are contemplating purchasing a template pack please take advantage of the present price.

Do not let the low price fool you, these templates are first rate and are covered by our 100% satisfaction guarantee. Where else can you purchase 90 edit friendly templates with RFQ’s, RFP’s, Contract, Policy samples and much more for under $100.00? … our best selling Packs work out to about .40 cents a template. These RFQ and RFP Template Packs have been generated by actual procurement and sales personnel and will literally save you hundreds of development hours.

How To Succeed With Tenders

Tender Response How To:

Tendering skills are a critical component of the professional buyer’s job description however, responding to a tender or RFQ is vital to the success of any business. If you fail to succeed on receiving the award on your tender responses it is  likely you will not be in  business very long. What is the key to increasing your chances at winning more tenders?

Preparation is the key element if corporations and individuals are to expect success from the tendering process.

While some of this preparation we are referring to can be expensive if your representative is to perform a site visit or take part in additional training but not all preparation is costly. [Read more…]

Subscribe and receive a free template pack

Free Template Pack:

Our FREE template pack contains a cross section of documentation: Document ID Number (Doc)  Doc1 – Request for Quotation Template, Doc2 – Invitation to Bid Letter, Doc4 – Service Contract, Doc19 – Basic RFQ, Doc33 – FOB Terms Defined, Doc58 – Short Form RFP, Doc60 – Statutory Declaration.

Immediately after subscribing, you will receive access to the FREE template pack via e-mail. This email will provide instructions to our download page along with a password to grant you access to download the files for free. Please add [email protected] to your safe senders list.

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If you are looking for a more robust RFQ, we recommend you consider the Premium Pack which includes: RFQ2 – Invitation to Bid Letter, RFQ15 – Instruction to Bidders (3 pages) and RFQ16 – Form of Agreement, Terms and Conditions (8 pages)…use them together. arrow-red-curved [Read more…]