The current economic situation is hard and unpredictable for many businesses across the globe. The inflationary period comes once in a while and people must prepare for it. But once it hits, you should evaluate the way you conduct your business and realize where you can improve and cut costs. All in order to lower supplier costs in an inflationary environment and stabilize the market in general. Your suppliers, customers, and other business associates will highly appreciate this approach. Especially if they are doing the same. Therefore, as one of the logistics companies in Saudi Arabia, you must do it right. Today, we will help you by providing five ways to achieve a positive result. Let’s take a look.
Revise your company’s business model
Moving and shipping companies will have to take a closer look at the current situation in the market. There are hundreds of parties and customers involved in the supply chain and all are affected by these changes. So, as one of the professional shipping and logistics companies you must take a closer look at your business model and the way you conduct your business. Hence, inspect the following aspects of your business:
- Customer support team.
- Sales and marketing team.
- Service packages.
- Prices and margins.
- Long terms investments and commitments.
Evaluating costs and downsizing where is possible is a way to lower supplier costs in an inflationary environment
Once you realize how each team works, you will notice there is room for improvement. You can cut costs and mitigate the damage to certain customers. On the other hand, you can accept higher margins and costs with other customers to keep them happy. Above all, to keep them in the business with you. Remember, the current situation is highly volatile and if you do not do this, other competitive logistics companies in Riyadh will.
Do not raise the price unnecessarily
The inflationary period is hard for all parties involved. Such a volatile economy will affect the prices of all services and in some cases, jeopardize future investments. So, after the late pandemic situation and now with the war in Ukraine, the whole world’s economy is shaken. You must take this into consideration when bringing the “price raising topic” to your buyers, suppliers, and 3rd party associates. If you have an open and honest relationship with your business partners, you will easily communicate this and ensure everyone is satisfied with the outcome.
Remember, you are all in this together. It would be just fine to accept changes from the other side while you introduce yours as well. All parties involved will raise and lower prices where necessary while keeping the healthy environment you all work in. This kind of approach is a great way to shield your business from the inflationary impact and at the same time lower supplier costs in an inflationary environment.
Introducing better deals is another way to lower supplier costs in an inflationary environment
There are many ways to keep the price healthy while keeping your customers and suppliers with you. A slight change in price won’t matter much if you toss in free shipping, delayed payments, extended warranties, or any other offer you see fit. If everyday citizens can logistics companies in Riyadh, you can do it as well.
A good example is when you offer warehouse for rent in Jeddah. You can toss in a month for free or lower prices for longer-term commitments. There are many ways to give something for free and in the process improve the business flow. But be careful while doing it. Do not hurt your business in the process.
Choose your investments carefully
The goal is to lower supplier costs in an inflationary environment but if that is not possible, you shouldn’t do it if it is going to hurt your business significantly. Of course, the situations will be different with certain customers. But smaller customers might be easier to handle while giants can hurt your business if they sway you into a deal that you can’t get out of. What we mean is that the inflationary period will come to an end at some point. And if you sign contracts, invest, or accept services while prices are volatile, you might not recover after the prices normalize. You’ll still have to pay the full price you agreed upon. All in all, be careful when making these decisions.
Now you know how to lower supplier costs in an inflationary environment. Also, you know how to make tough decisions under the pressure the volatile economy has on everyone. Hopefully, you won’t have too many problems implementing our ideas and solutions. Good luck and stay safe.