Despite the economic downturn caused by COVID-19, supply chain teams have an opportunity to assess supplier risks and reduce costs for their businesses.
Provider contracts often contain volume clauses that directly impact the price paid for goods and services.
Examples of clause language may include:
- “Tiered pricing levels”
- “Single purchase order discounts”
- “Rebates and credits”
Be vigilant. Watch for ramifications related to these discount structures. Doing so will minimize risk and optimize your volume-based pricing when inevitably your…
1. Purchasing volume decreases
2. Purchasing volume increases
Due to an unexpected spike in new business, higher purchasing volumes should trigger a reduction in the purchase price and improve margins.
3. Purchasing volume remains consistent
Despite no material difference in your purchasing volume and unchanged pricing, it is prudent to contact your suppliers to ask about potential volume discounts through aggregated purchasing or if certain thresholds are met.
Our Best Advice:
More vital than ever is proactive vendor communication
Timing is key
If you need assistance negotiating volume discounts, contact us for professional assistance. We are offering a complimentary roadmap to aid in profit recovery. Our model is performance-based, so no savings found, no cost to you.
Let us know if we can help