In the competitive field of information technology, relationships are vital in ensuring that the retail outlet has the best prices possible to offer clients. Often the relationship between a wholesaler and an outlet determines the level of success, or how competitive the outlet is in the market. At first glance, playing supplier prices against each other seems like the best option to getting the lowest prices; however, it may influence the relationship with your suppliers and could eventually result in burnt bridges that will isolate your outlet from the rest of the market.
By giving each supplier a fair and equal opportunity to tender for your business, you ensure that your outlet gets the best price possible without damaging strategic relationships.
There are, however, often other factors to consider other than simply the lowest price. A supplier may quote the lowest price on a certain item, but will neglect to include the logistical fee involved. In the IT business, where an outlet will regularly place orders of R500 000 or more a week, logistics can be an expensive exercise. However, it is the procurement manager's responsibility to attempt to negotiate the price of logistics into a bigger deal as it can drastically affect the retail price.
With six years' experience as procurement manager for a leading IT retailer, Alex Gous explains what he views as the ideal wholesaler: "A wholesaler who engages with the retailer, indirectly sponsors projects for roadshows and events, that never turn down opportunities to get involved with industry activities, that is in the know about industry trends and that would at times subsidise product promotions will always be in favour with a procurement manager.
This being said, I feel that the single most important element of a successful wholesaler is the level of after-sales service that they give to their outlet's customers. If a product experiences a fault that is not due to user negligence, the way that it is dealt with is vital to ensuring repeat business. Word of mouth is incredibly powerful and unsatisfactory after-sales service can be devastating for a retailer's reputation."
Like any retail business, there is an influx of low-quality products that aims to undercut higher priced and superior quality products. However, these products often have a negative effect on the retailer's reputation with the public and may affect the relationship between a retailer and the wholesaler, as they have no after-sales service and are more than likely to experience failure in one form or another. It is the procurement manager's responsibility to monitor the return rate and thereby ensure that the only highest quality products are available to their customers.
By maintaining a healthy relationship with your suppliers and ensuring that your customers get the best deals on the best quality products, a dedicated and proactive procurement manager can mean the difference between sink or swim in the competitive and somewhat cutthroat IT industry.
