Vendor Bender
How to induce your vendors to lower their prices
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Business Start-Ups magazine, May 1998 Problem: You believe you could improve your cash flow if
your vendors lowered their prices. Solution: Don't forget, your vendors have businesses
to run, too. There are a couple of different financing methods that
might induce your vendors to lower their prices for you or to help
you improve your cash flow. Here are some ideas: - Fixed price: By buying the vendors' products
outright and paying for them immediately, you may be able to
negotiate lower purchase prices. There is no risk to the vendors,
who receive the payment immediately, thereby improving their cash
flow. In exchange, they may very well be willing to lower the total
prices of the products or services you're buying, producing a
savings for you.
- Incentives: If you need to improve your cash flow, you
may find it worthwhile to pay your vendors a little bit more for
their goods--if the vendors will wait until you have completed your
sales and received payment from your customers for them. Such an
arrangement costs you a little more, but it improves your cash
flow, while the vendor gains some extra money in exchange for
delaying the due date of your payment.
Content Continues Below
Excerpted with permission from Roger Fritz's The
Small Business Troubleshooter (Career Press,
$16.99,1-800-CAREER-1).
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