How We Deal
Monday, October 20th, 2008
How many times as a Sales rep have you walked in to a meeting with a Retailer and heard them say, “as a company we are looking to cut our costs next year”? Well if your hand isn’t up then I would like to talk to you after class! If I had a nickel for every time I heard about cutting costs………………oh forget it!
During these times of material increases, fuel surcharges, and increased labor rates every company is looking for ways to cut cost and increase margins. It seems to me that the first way they look to accomplish this task is by getting their suppliers to lower their price! Well this usually leads to a win-loss situation at both ends of the spectrum. For the supplier, in order to lower their price they may have to cut back on the quality of the product being produced, ultimately cheapening the product and decreasing it’s shelf life (total cost of ownership people!). No savings there for the retailer! For the Retailer, they may get the desired price they are looking for at the expense of the Supplier’s margins. Thus possibly pushing them out of business in the near future. No product from that Supplier anymore! (more…)

