There are two ways to make more profit in a company…..sell more stuff and cut your costs.
This is Profit 101, no matter the size, age, success, or goods of the company, profit works universally. Companies that profit well focus on both.
The good news is that your vendors can help you with both sides of this profit equation, they can help reduce costs AND help you sell more stuff at the same time.
It’s extremely important to build relationships with your vendors as those around you can bring in new customers/clients and increase awareness of your company branding.
The people you work directly with on your products and services are really the ones with the most to gain when you find success. By taking the time to get to know them, you’ll find a whole host of opportunities you didn’t realize were there.
Look for great ways to offer your vendors rewards for helping grow your business and everyone wins. One of ways you can do this is by offering performance based incentives that are much larger than their normal charges.
Here’s the step-by-step process to putting together a partnership with a vendor:
1. Approach all the vendors you work with and offer an incentive based on performance.
2. Put the generous incentive plan together from their perspective. Take suggestions.
3. Develop a clear, concise and easy to track incentive plan, this will increase competition between vendors and therefore higher performance levels.
4. Encourage subsequent sales instead of focusing only on the initial sale. By doing this you can give away more of the profit from the initial sale to your vendors and make higher profits off the back end products. Encourage:
Upsell better and more profitable products/services
Cross-sell to additional products
5. Create an incentive plan that’s irresistible to your vendors by offering generous, exclusive compensation.
6. Offer incentives for continuous improvement. Reward your vendors for driving out inefficiencies and saving time and money.
Think of all the vendors you work with and the creative ways you can put together an incentive plan that entices them to be part of your business. Use their talents, capabilities and connections and you’ll both be winners.
Carmen Ventrucci’s motto is Follow Your Road. She knows small business owners create their business so they can make an impact for their clients, community, family, and life.
Nicknamed by her clients as ‘The Girl with the Golden Shovel’' due to results, Carmen helps her clients scale and grow their business so they can magnify their impact. Carmen is a small business consultant based in St. Paul, MN, and serves clients across the USA with her company, True SISU Life, LLC.