Hire some purchasing interns to take the time and review prices on a multitude of your simpler purchases. Tell them they are going to search prices in the market for not only your firm but also for your neighbors. They are to get as many bids as possible for the commodity type items in the market.
Purchasing steps for your interns to take to save your company money.
- Select four or five interested purchasing agents in your neighborhood working for other companies.
- Tell them they each need to hire a temporary intern who will report to the other four hired at other participating companies.
- Ask that they create a list of goods or services they purchase frequently that they would like to see comparative bids. It is irrelevant if their purchase quantity is small. With four others participating, explain that they will potentially obtain bargaining power if the project is successful.
- Go to a local business school and ask the business department to help suggest or select a group of sharp interns for this project. Indicate that you want aggressive participants. If you wish, offer a bonus percentage to be paid on the savings derived from this project.
- Hire four or five of the best candidates for your comparative purchasing project.
- Place each intern in each of the participating companies.
- Make sure each knows where to search paid invoices in the AP department and give them permission to pull and report invoice amounts.
- Show these individuals where purchase orders are retained.
- Arrange a meeting among the participants to select an array of products or services that are common to most or all of the companies.
- Choose items such as copy paper, automotive services (i.e. oil changes, new tires, quarterly maintenance on company vehicles), roll paper, shop rags, uniforms, work gloves, lawn care, vending machines, freight or delivery costs for similar or like trips, FedEx or DHL costs, etc.
- Have the interns pull information about prices and assign one to create the overall cost comparison that analyzed item and the five different prices. Make sure to get the name and telephone number of the lowest cost vendor to share with all of the participating companies.
- List the winning vendor who sold the product as the cheapest price and ask if that vendor will come in to your group and offer a better price if more or all of the five companies agree to purchase from this vendor.
- The leverage the group has now should yield a better price than the best one in the group, so ask for it.
- The worst that will happen is the lowest vendor refuses to give out this price to others and thus, you announce to him who the second place vendor was whom you are forced to call now.
- Your mission for all of these comparisons is that you want a better price for everyone, so tell your vendors this upfront. They will get more business and your neighbors will save money.