Tuesday, April 12, 2011

Time to start reviewing your supplier contracts?

It may be a bit alarmist, but I am of the opinion that if your products are tied in any way to the commodity markets (they probably are even if indirectly), then you need to take time to review potential impacts to your COGS as prices start to escalate.

The world is in much turmoil lately and this has already pushed up the costs of numerous items. Your supplier(s) will have to increase their pricing, and this means you may have to consider the same. Time to start discussing these matters with your colleagues and representatives.

The marginal growth of the US market seems to be more of a propping up than structural soundness. Look for opportunities to take discounts from your supplier(s) and incentivize your customers with them as well to maintain solid cash flow.

I expect in the next few weeks to get back to the more detailed posting that started this blog, but I will continue to place these smaller posts in the mix.
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