Suppliers and customers; both need each other to keep their businesses afloat – most of us would agree. Interestingly, hospitality businesses could get more out of the relationship they have with their suppliers if they approach certain aspects with a different mindset. Of course, having the right tools and information at your fingertips helps too.
Historically if you are looking for a product or service you look at a range of suppliers, probably choose the one offering the best prices or deals at that point, or you might have a penchant for choosing and supporting businesses that are local to you. Whatever the reason, once those suppliers are on board it is very easy to settle back into a routine and a few years down the line you may find that the agreement you now have isn’t quite what it was when you first signed up. You’re regularly overspending and you can’t see the wood for the trees.
Food inflation continues to be an issue for the industry (as mentioned in one of our previous blogs looking at coping with price hikes from suppliers), and this brings with it a number of challenges. Do we shop around more? Will the quality we receive be the same if we choose a less expensive supplier? Should we ditch local businesses and go for suppliers that are national but cheaper? These are all questions we wrestle with in the hospitality sector. The reality is, cash is king and being comfortable with what we are spending is huge.
If your supplier relationship has changed or there is something you want to address, the answer may be obvious – communicate your requirements to your supplier. But it is not always that straight forward is it? You might want to ask for a better deal, a loyalty discount or perhaps agree fixed costs on certain products – but what is the likelihood of getting the result you want?
The truth is, it may be simpler than you think. Knowledge is always power, so if you want to discuss price hikes and discounts you need to obtain the information that will support your case. For example, having access to supplier data nationally and being able to highlight the costs you would be paying (in reality/real time) were you to jump ship to another party, might have the reverse effect. In fact, it does have the reverse effect because we have seen it happen. Your supplier wants to retain your business, if they are presented with black and white information to consider, there will be a much greater chance of negotiation on your part. If you can come to an agreement that is mutually beneficial for both parties the relationship will not only be stronger in the future, but you will have set a benchmark for the future too in terms of communication and negotiation.
Using the power of advanced eProcurement technology will also help you to better manage your supplier relationships and more importantly, control exactly what you are spending with them at any point in time.