Is your office products supplier giving you what you need? How do you know if you don’t check around?

 

At Corporate Express, we operate in a very dynamic and progressive marketplace. Changes in the service offering and capabilities of suppliers occur at a hectic pace. For this reason it makes good buying sense to keep pace with what the market offers, as new developments may save your organisation time and money.

 

It makes sense to compare offerings – a little bit of time spent now may save you hundreds of dollars later on.

 

Examine your supplier’s ‘value proposition’ which is not just based on price – it’s a combination of price, service and capabilities.

 

The best way to do this is to narrow potential suppliers down to three, and then go and have a physical look at their operations. You’ll learn a lot more about a supplier and whether they can actually do what they say they can do, by walking the floor. This will help you make an educated decision based on their capabilities to service your company.

 

Here’s a good example:

Your company has state offices in Sydney and Brisbane, and regional offices in Dubbo, Newcastle, Gladstone and Townsville.

 

No. 1 supplier only has offices in Sydney and Brisbane.

No. 2 supplier has offices in each of your locations.

 

No. 1 supplier’s pricing is more competitive than No. 2, so you select that supplier – and then you find out that your regional offices struggle with long delivery lead times, returns and back-orders etc. The saving in product cost has now probably been overtaken by the increase in process costs due to the lack of service to your regional offices.

 

What can you do? Negotiate with No. 2 supplier on pricing, ensuring all locations receive an equal level of service.

 

At the end of the day, pricing is the easiest thing to fix, because it’s flexible and based on a constant – the supplier’s cost price.  On the other hand, service capability is far harder to fix, as the problem could be related to staffing, inadequate systems or third party distribution…and so on.

 

Obviously if you partner with a supplier that has stronger buying power, then they have an advantage and can pass that price advantage on to you.