For instance, when you build effective, long-term relationships with your vendors, you don't just help ensure that you'll get good service. You can also maximize those relationships to help manage—or reduce—costs substantially. Here are five ways that you can cut costs through effective vendor relationships.
If you supply snacks and drinks for training programs, company picnics and other events scattered throughout the year, don't buy bottled waters and sodas each time you need them. Purchase them in bulk and keep them on hand to use when needed. If you take time to think carefully through all the purchases you make in a year, you will likely come up with a number of items that can be purchased in bulk from your vendors at lower prices.
For instance, business consultant Kevin Coyne recommends personally contacting the local managers of hotels where employees regularly stay to ask for discounts. By doing so, one of his client companies achieved discounts of more than $300,000 a year, he writes in the Harvard Business Review.
For instance, you might join with three other companies and explain to your vendor that you will all purchase from him for a period of three years for a 25 percent price cut. Because such a deal brings your vendor the business of four small companies, he may be willing to make that bargain.