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How to Leverage Your Spend for Dental Supply Cost Savings with a Multi-Vendor Sourcing Strategy

August 16, 2021

We aren’t all master negotiators. In truth, many of us find negotiating better pricing to be awkward and intimidating. However, cutting your dental supply costs doesn’t necessarily mean sitting your vendors down and beating them up on price with highly tuned skills and aggressive negotiating maneuvers.

In the world of dental procurement, practices may often find that those responsible for the buying of supplies feel out of their depth. With little to no tools to handle the complexities of procuring the long list of highly specified items that dental services require, your employees may be drowning, fighting to manage your purchases, and sinking your profitability along with them.

You’re more likely to get where you want to go by aligning your values and objectives with your purchasing strategy, implementing streamlined and efficient processes, and educating your employees on what they should and shouldn’t be doing.

Methods cloud-based procurement software is designed to give you the valuable data you need to control your dental practice overhead and create a winning, returns improving strategy.

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    Dental Supply Vendor StrategiesDental Procurement Strategy

    To create the right competitive environment that breeds improvements and cost savings, you must leverage your purchasing power and manage your supplier relationships in a manner that keeps vendors interesting and working hard for the betterment of your dental practice. Like in your personal life, supplier relationships have different maturity levels and can play different roles.

    Transactional

    At the onset of a supplier relationship, most transactions are precisely that, transactional. Depending on the advancement of your purchasing practices, you may have had little if any interactions with the supplier. You source the product, perhaps online, place the order, likely with no negotiating, they deliver, and you pay.

    Tactical

    In a tactical relationship, through meetings and discussions, you have established their capabilities and service standards. You have put some effort into building or at least initiating a connection and have provided them with some knowledge of your business, and perhaps given them an idea of your dental supply requirements.

    Preferred

    A preferred supplier has some prior history with your company and has demonstrated their abilities to the point that you now prefer to purchase from them over other suppliers. At this point, their pricing should be known to be competitive.

    Strategic

    Strategic suppliers are awarded a significant portion of volume through long-term collaborative efforts, proven superior service, and top pricing.

    How to Create Competition Among Your Dental Suppliers

    Suppose you’ve put little effort into your procurement practices and are “awarding” all of your business to transactional suppliers. As you progress along your path to better procurement, the goal should be to start seeing this slowly flip on its head by monitoring service levels and pricing while cultivating relationships with the right suppliers.

    You’ll want to give thought to how many suppliers you want to keep in the mix and how you want to disperse your volume. However, in many instances, juggling three to four suppliers (one at every level) creates just the right competitive environment. You want to ensure to give suppliers enough volume to keep them interested in your business and hungry for more.

    Of course, there are more do’s and don’ts, as well as ethics to uphold. Supplier relationship management should align with your company values and objectives. But the take-home here is this, regardless of who manages the day-to-day procurement or how much negotiating skill your company has ready to deploy, cost savings can be achieved simply by doing your homework and setting the right strategy. Pin them against themselves and let them go to battle because your business deserves to be hard-worked for, and your profitability depends on it.

    How Dental Inventory Management Software Can Help

    While nothing can replace the human to human element of communication that the negotiation of your supplier prices needs, software can help you keep track of it all to make sure you’re getting what you’re paying for and you’re paying the right price for what you’re getting. Method’s cloud-based software helps you keep track of all of your procurement strategies, inventory, and more. Contact us today to see a demo and talk to a representative about how our software can revolutionize the way you purchase dental supplies for your practice!