6 Effective Ways to Boost Your Company's Purchasing Power

Boosting your company’s purchasing power means having the ability to acquire more of the goods you need at a lower price point, as well as supporting your purchases with suitable financing solutions. In today’s uncertain environment, ensuring your finances are strong and your processes are stable is vital for preparing your business for the future, which is why your purchasing power deserves immediate attention. 

With that in mind, here are some simple yet effective ways you can improve your company’s buying power and ensure success:

Leverage purchasing analytics

In case you want to utilize your existing purchasing power to the full extent, you have to make wise decisions. Using applications and software solutions to find the best possible deals is truly necessary for today’s environment. 

Procurement analytics is the aspect you should focus on the most. The right analytics tools can support nearly any purchasing procedure, whether you’re searching for new suppliers or negotiating existing contracts. From sustainability to distribution, every part of the procurement process can be enhanced by analytics and the valuable insights they provide.

Purchase with more foresight

If you can’t be a large company quite yet, try purchasing one. By planning and timing your purchases accurately, you might manage to perform transactions of certain sizes and prices that will attract the attention of big vendors. 

Buying units in bulk may not be the right solution for your business at all times, but planning for grouped purchases in advance can allow you to reach a good buying power level at an appropriate time. Think about your cyclical purchases, any large orders in the past, and one-off purchases that turned into regular needs when developing a suitable plan.

Consider trade finance options

When attempting to increase your purchasing power to a higher level, a beneficial trade finance solution can be of great help. By providing your company with a revolving line of credit to pay international and local suppliers alike, trade finance can give you the freedom you need to scale and grow your business. 

You will be able to choose only the best partners for your needs, set your own trading terms, close your working capital gap, and avoid common cash flow issues. This financial product can give you the flexibility to diversify your working capital funding and empower you to finally go global.

Join group purchasing organizations

If you’re running a small company, it can be challenging to attract great vendors who might not see you as profitable. Joining a group purchasing organization (GPO) can be a great solution to this issue, allowing suppliers to see you as a much bigger player. These organizations combine the purchasing power of several small businesses into conglomerated purchasers, enabling them to get better deals similar to large operators. 

Along with better pricing, the benefits of joining a GPO also include higher success in terms of custom orders and niche requests. This can give your operations an instant boost, as long as you make the right choice.

Form purchasing partnerships

If joining GPOs isn’t the right solution for your company, you can achieve a similar effect by partnering with other businesses. Whether you find national or local prospective partners, contact all companies that purchase similarly to yours and ask them if they would be willing to do partnered purchases. Whichever business can help you get the products you need at a lower price is a potential partner you can work with, so make sure to stay open-minded when finding suitable partners. 

While this won’t give you the same benefits as joining a GPO, forming purchasing partnerships will aid in boosting your purchasing power as well.

Consolidate purchase orders

Although an often overlooked factor, the vendors and suppliers you work with can carry various products you need and offer to your consumers. However, you are only purchasing one or two items from them, without you or your partner being aware of this potential issue. 

To consolidate your purchases, audit your supplier list and their products, and don’t forget to include pricing. If you manage to find suitable solutions, work with your suppliers to see who is willing to make a different deal and provide a better offer. This might be time-consuming, but it’s worth the funds you will save on future volume discounts.

Regardless of the solutions you opt for, there’s no denying that investing in your purchasing power now is more important than ever. By boosting your buying power, you can strengthen your company’s operating potential and ensure continued success.