Flex Your Buying MuscleFlex Your Buying Muscle
Tips for getting the same deals on IT products and services as companies that can buy in bulk.
June 12, 2006
Your business is growing. You're getting ready to submit a purchase order for two high-end servers. This is a big deal for a company your size, but practically meaningless to the vendors, who reserve their best prices and perks for the Fortune 1,000. Right? Wrong.
Just ask the vendors. "Small businesses represent one of the major growth areas for IBM today--it's absolutely a key focus and we're investing significantly in it," says Jeff Krider, vice president of worldwide SMB software sales for IBM. At Hewlett-Packard, small and midsize businesses account for a third of global business, says Denise Marcilio, marketing director for small and medium business, HP Americas. "They're very, very important to us."
But it's not surprising you often feel like an insect among elephants. After all, many vendors are relatively new at working with smaller companies, and are still trying to figure out the best ways to build mutually beneficial relationships. Here are some tips to boost your buying power.
» Nudge. You'd be surprised what you can get if you're even the least bit assertive. Demand discounts and additional services bundled into orders, and collect business cards so you remember whom to contact. "I'm just a guy in a 110-employee firm, not GM or Ford, yet top people from this major vendor routinely invite me to breakfast," says Bill Case, manager of technical support for Peter Basso Associates, a small engineering firm in Troy, Mich. Case has standardized on HP because of the access he's managed to develop over the years. "But it's not like they come out and say, 'Would you like us to pay more attention to you?' You have to ask, and push a little."
» Solicit competing bids. Savvy small businesses exploit a variety of purchasing channels--including direct-from-vendor, online retailers, discount catalog houses and specialized suppliers--to get the hardware, software and services they need. People will be responsive if you tell them you've sent RFPs (requests for proposals) to multiple sources. "If we know it's a competitive deal, we'll do what we can to get an edge--create bundling options, or include more functionality in the overall solution ... whatever it takes," says Bill Whalen, sales and marketing rep for RJS Software Systems, an IBM systems integrator in Burnsville, Minn.
» Leverage dealer incentives. Vendors routinely provide dealers with rebates and other incentives to promote particular products and services. Although not specifically targeted at customers, such "hidden" discounts give partners leeway to make you deals in competitive situations. IBM, for instance, is currently giving away 15 percent rebates to small business resellers. An aggressive dealer will pass some or all of those savings onto customers savvy enough to ask if any such programs are available.
» Monitor special offers. The reason large buyers get big bucks knocked off their IT bills is that they buy in volume. But smaller businesses can get equally good deals--when a vendor offers a short-term promotion, such as a free monitor bundled with every desktop purchase, or $500 off a brand-name laptop, for instance. Being flexible about the types of product configurations and models you'll accept is obviously in your best financial interest. Check vendors' Web sites (this one, for example) and register for relevant vendor e-mail lists (like this one) to stay current on these specials.
Bottom line, you're stronger than you think. Put your power to good use in the wild world of IT procurement.
Alice LaPlante is editor of CMP's Small Business Pipeline (smallbizpipeline.com). Write to her at [email protected].
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