Quotes and potential cost savings summary

If you can’t pass a price increase from a supplier on to your customers, then think laterally about renegotiating other contracts to obtain offsetting reductions in their prices. To do this successfully you’ll need quotes from competing sources and to calculate the potential cost savings from each.

“Add on” costs

Target those suppliers who may have seen technological efficiencies that they haven't yet passed on to you because your contract hasn’t been renegotiated in the last year or two. For each product or service try to get five quotes from different suppliers.

Any quote can seem attractive on a basic price per unit comparison but watch out for additional “add on costs”, such as administration fees, delivery charges etc. This is where the supplier will quite legitimately try to claw back some of the profit that they are passing on to you. This is why it's worth spending the time to make sure quotes are comparable using our Quotes and Potential Cost Savings Summary.

Annual savings

For each new supplier the total cost is therefore the basic quote plus add on costs. Comparing this to your existing supplier’s price will give you a potentially better or worse off scenario in monetary terms. Annualise this saving to see how much your business could gain from choosing the new supplier.