97 Reasons Why Suppliers Put Up Their Prices … and 11 Things to Do About It.

Strategies for Reducing Supplier Costs and Avoiding Price Rises

If you haven’t already been hit by one of these 97 then chances are it’s right around the corner.  So you need to do something about it.  But what! 

Check out our list below and highlight the ones that you think are the most likely to impact your business.  Then keep scrolling and read about 11 Strategies you should consider to remedy or avoid those painful price rises.

97 Reasons to Increase Price

  1. You are too difficult/they don’t like you
  2. Change in market size
  3. Change in political climate
  4. Change in trade negotiations
  5. Changes in business strategy
  6. Changes in consumer preferences
  7. Changes in currency exchange rates
  8. Changes in distribution networks
  9. Changes in government subsidies
  10. Changes in import/export regulations
  11. Changes in industry standards
  12. Changes in labor laws
  13. Changes in production processes
  14. Changes in regulations and compliance requirements
  15. Changes in supplier management processes
  16. Changes in supplier policies
  17. Changes in supply chain structure
  18. Changes in tax laws
  19. Changes in trade policies
  20. Corporate social responsibility initiatives
  21. Cost of raw materials
  22. Currency fluctuations
  23. Economic recession
  24. Economic sanctions
  25. Environmental and sustainability regulations
  26. Globalization
  27. Government interventions
  28. Higher demand for products
  29. Higher labour costs
  30. Increase in compliance requirements
  31. Increase in customs clearance costs
  32. Increase in cyber-security costs
  33. Increase in demand for natural resources
  34. Increase in demand from emerging markets
  35. Increase in energy costs
  36. Increase in environmental compliance costs
  37. Increase in health and safety compliance costs
  38. Increase in import and export fees
  39. Increase in import/export duties
  40. Increase in intellectual property costs
  41. Increase in interest rates
  42. Increase in inventory carrying costs
  43. Increase in legal and regulatory costs
  44. Increase in logistics costs
  45. Increase in marketing and advertising costs
  46. Increase in marketing costs
  47. Increase in packaging and labelling costs
  48. Increase in product complexity
  49. Increase in product liability insurance
  50. Increase in production capacity
  51. Increase in production costs
  52. Increase in quality standards
  53. Increase in research and development costs
  54. Increase in risk and uncertainty
  55. Increase in social compliance costs
  56. Increase in staff turnover
  57. Increase in supplier audits and inspections
  58. Increase in supplier capacity requirements
  59. Increase in supplier certification and qualification
  60. Increase in supplier collaboration and partnership
  61. Increase in supplier diversity and inclusion requirements
  62. Increase in supplier engagement and communication requirements
  63. Increase in supplier environmental responsibility requirements
  64. Increase in supplier ethical responsibility requirements
  65. Increase in supplier innovation requirements
  66. Increase in supplier monitoring and reporting.
  67. Increase in supplier performance metrics and KPIs
  68. Increase in supplier performance reviews and feedback
  69. Increase in supplier quality requirements
  70. Increase in supplier risk management requirements
  71. Increase in supplier social responsibility requirements
  72. Increase in supplier sustainability requirements
  73. Increase in supplier training and development
  74. Increase in supplier transparency requirements
  75. Increase in supply chain complexity
  76. Increase in transportation costs
  77. Increase in transportation costs
  78. Increased insurance costs
  79. Increases in demand for commodities
  80. Inflation
  81. Intellectual property costs
  82. Investment in new technology
  83. Limited availability of certain resources
  84. Limited availability of skilled labour
  85. Market competition
  86. Market demand and supply
  87. Natural disasters
  88. Product innovation
  89. Rise in energy costs
  90. Rise in wages
  91. Seasonal factors
  92. Short-term market volatility
  93. Supply chain disruptions
  94. Taxes and tariffs
  95. Technological advancements
  96. Trade restrictions
  97. Unforeseen events

11 Strategies for Reducing Supplier Costs or Avoiding Price Rises.

Establish long-term partnerships

Develop long-term relationships with suppliers based on trust and mutual respect. This can lead to better collaboration and a willingness to negotiate prices and cost reductions.

Provide forecasted demand

Provide suppliers with accurate forecasts of demand, so they can plan production and avoid unnecessary inventory buildup, reducing costs.

Streamline processes

Work with suppliers to streamline processes and reduce waste. This can lead to cost savings and increased efficiency for both parties.

Implement joint cost-saving initiatives

Collaborate with suppliers to identify cost-saving opportunities, such as joint procurement, bulk purchasing, and shared logistics.

Implement supplier development programs

Invest in supplier development programs to help suppliers improve their processes, quality, and efficiency. This can lead to cost savings and increased competitiveness.

Negotiate pricing

Negotiate prices with suppliers based on volume, timing, and quality. This can help reduce costs and avoid price rises.

Offer early payment discounts

Offer early payment discounts to suppliers, encouraging them to reduce prices in exchange for prompt payment.

Leverage technology

Leverage technology to improve communication and collaboration with suppliers, streamline processes, and reduce costs.

Optimize inventory management

Optimize inventory management to minimize excess inventory and reduce costs associated with storage and logistics.

Monitor supplier performance

Monitor supplier performance to identify areas for improvement and ensure that they are meeting quality and delivery standards.

Evaluate alternative suppliers

Evaluate alternative suppliers to increase competition and negotiate better pricing and terms with current suppliers.

Get help with Implementing These Strategies

Did I say 11 Strategies?  Well, here is a bonus 12th for you.  Don’t try this on your own if you don’t have the internal experience or capability. Get Help. Comprara are leaders in procurement consulting, procurement data analytics and procurement capability working with many of Australia’s major companies, Governments, and non-profits. Our expertise and tools can help you gain more ground through enhancements in your procurement processes, data analysis and people skills.  Please reach out for assistance with any of these 11 strategies or more.