A popular trend in purchasing over the last five to ten years is known as supplier reduction. It’s also called vendor consolidation, lean supply chains and a host of other names found in other sales blogs and publications. Whether you realize it or not, it has affected your sales efforts because many medium to large companies have probably already looked at you as a candidate for elimination.

However, I have some good news and sales tips I’ll cover below in this sales blog post.

“It sounded like such a good idea when presented by the bean counters.”

Supplier Reduction 101
Before I share the good news, let me provide some background. As companies became increasingly aware of the cost and overhead of dealing with multiple vendors, they came to the following conclusions:

1. Having fewer suppliers means less administrative overhead.
2. Having fewer suppliers provides more leverage with the remaining suppliers.

Estimates vary, but medium to large companies have been attempting to reduce their number of suppliers by 50 to 75%. I’ve heard of some reductions as large as 90%.

Positive Sales Tips
Now for the good news. This is one of those “the pendulum always swings the other way” stories. A recent IW Best Plants report indicated that for the first time in four years companies are adding suppliers again. There was a small net gain in the number of suppliers for the sampled companies.

This study seems to indicate many companies may have overreacted to the supplier reduction concept and now realize it takes more than a handful of suppliers to efficiently and effectively provide their needs. We’ve been saying that all along in this sales blog.

What kinds of sales tips can we garner from this study?

At a time when we’re endlessly hearing media types frothing at the mouth with excitement over the latest tidbit of bad economic news, there is actually some positive news here. This good news influences our selling environment directly.

Sales Blog Epilogue
Medium and large companies across America have collectively concluded they might need more vendors and suppliers after all. Supplier reduction sounded like such a good idea when presented by the bean counters. In practice, however, it’s not working as well as they thought.

Time to go help a prospect find a much needed supplier. You.

©2010 Scott R. Sheaffer

Related posts:

1. A Reader Has Anxiety About The Growing Trend Of Supplier Reduction
2. How Drano Can Help Us Deal with the Economy
3. The Power Of Positive Speaking Isn’t Always So Positive

Tags: Prospecting, prospects

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