Digital Dealer - November 2017 - 24

DEALERSHIP MANAGEMENT

Continued from pg. 23

contracts and agreements when needed.
Benefit: Having all contracts and agreements in
one central location will
simplify the management
of this important process
and allow for a tracking
process to ensure proactive management.

3. TRACK CONTRACTS - Once all

of the contracts are
centrally located, it is
time to create a tracking
device to manage all of
the documents. This can
be done easily in Excel
or setting up due dates
n Outlook for automatic
reminders. You will want
to ensure that you give
yourself 90-120 days
before the expiration
date so you have time
to manage the process
effectively. Benefit:
Tracking contract due
dates and being proactive with next steps will
prevent auto-renewals
which some suppliers
bank on. Auto-renewals
not only lock you into
agreements long term,
but frequently have built
in price escalators that
raise prices and raise
your costs.
REDUCE COSTS -
INCREASE PROFITS

24

NOVEMBER 2017

will become the basis of
your RFQ (request for
quote). Secure multiple
quotes for the category,
then analyze the results,
negotiate high expense
items and make a supplier decision. Benefit:
Quoting and negotiating
at the category level
will ensure that the time
spent on this task is the
most efficient. Securing
competitive pricing that is
locked for a wide range
of items or services will
provide the greatest economic benefit near term
and long term.
3. NEGOTIATE TERMS

A SIMPLE SET OF
PURCHASING POLICIES
IMPLEMENTED ACROSS
AN ORGANIZATION
WILL REDUCE RISKS
ASSOCIATED WITH
THE COMMITMENT OF
FUNDS, SELECTION
OF SUPPLIERS AND
PAYMENT PROCESSES."

A key component of
purchasing is the commitment to a supplier for
the purchase of a good
or a service. While it is
fair to expect the supplier
to make a profit so that
they can stay in business, you can't afford to
overpay because you
need to make a profit to
stay in business too.

1. IMPLEMENT FIXED
PRICING STRATEGY -

To use your time wisely,
and to manage your limited dollars effectively, be
sure to adopt the policy
of securing fixed pricing
on supplies and services
for a minimum of 12 to
24 months if possible. In
most cases the supplier
will agree to those terms
without a contract. Benefit: Working with multiple
suppliers to obtain quotes
is a time-consuming
process. When you
finally make a supplier
selection, you will have
expended many hours
of time in the process. It
is imperative to reap the

benefits of those labor
hours over the long term,
and achieve cost savings
on a sustainable basis,
so the most efficient and
effective approach is to
secure long-term pricing.

2. PURCHASE AT THE
CATEGORY LEVEL NOT
THE ITEM LEVEL - The

most efficient use of time
and money is to quote
large groups of items,
rather than single items.
Suppliers can provide usage report or sales report
that list every item they
sell you. Ask your suppliers for that report which

D I G I TA L D E A L E R . C O M

AND PAYMENT METHODS - The price you pay

for an item is usually the
only component that gets
attention in a purchase
decision. Be sure to
request early payment
terms, free delivery,
delivered pricing, warranty protection, ability
to pay the supplier with a
credit card and any other
business requirement that
could have an economic
benefit. Benefit: The
combination of a broad
group of items at the category level, competitive
pricing, use of a single

supplier, well-constructed business terms
will provide economic
advantages that can
be measured and...
those benefits will drop
to the bottom line as
new profits...something
all businesses need for
sustainability.
Now is the time to begin planning for a more
profitable, more efficient
and less stressful 2018.
A bit of organizing and
planning as outlined
above can create
sustainable benefits
for your organization.
By implementing the
steps mentioned in this
article, you will generate
soft cost savings (labor
costs) and hard dollar
saving (dollars expended), improve your
profitability and certainly
mitigate your level of
financial and legal risk.
DOUG AUSTIN is the
Founder and President
of StrategicSource, Inc.,
the leading provider of
Spend Management
Services (strategy, spend
mapping, sourcing,
process improvement and
audit) for the automotive
and truck dealerships,
and various other
vertical markets. Doug
is a veteran of the U.S.
Marine Corps, a graduate
of the University of St.
Thomas, and a speaker
at various conferences
and 20 Groups. Doug has
acquired 30+ years of
line, staff and executive
experience in Spend
Management and Supply
Chain Management in
various vertical markets.
EMAIL: daustin@
strategicsource.com


http://www.DIGITALDEALER.COM

Table of Contents for the Digital Edition of Digital Dealer - November 2017

Digital Dealer - November 2017
Contents
A Letter from the Show Director
Don’t Be a “Management Jerk” and Steps for Handling Them!
Attempting a No-Huddle Offense? How’s That Working for You?
Is a Financial Partnership in Your Future?
Fallacy
You Can't Take a Train 500 Miles on 400 Miles of Track
4 Tech Tools That Decrease Employee Turnover
Organize for 2018 – Expect Greater Efficiencies and Profitability, Fewer Surprises
Retail Warranty Reimbursement: Leveling the Playing Field
Cracking the Car Code on Selling to the #1 Buyer: Women
Professional Voice-Over Secrets!
CAMERON JOHNSON Dealer Principal, Magic City Ford Lincoln
When It Comes to Social Media... Don't Step on a Rake
The Online Shopping Experience Has Radically Changed. Your Dealership Can Reap the Benefits.
The New Car Manager's Modern Guide to Merchandising
Top 3 Information Technology (IT) Recommendations for Stability and Increased Productivity at Your Dealership
That’ll Bee $128 Forda Tech Ta Lookatit - Ouchie
Only 5 ½ Cents- Per-Mile to Maintain a $50K Machine! Wow!
Digital Dealer - November 2017 - Digital Dealer - November 2017
Digital Dealer - November 2017 - Cover2
Digital Dealer - November 2017 - Contents
Digital Dealer - November 2017 - A Letter from the Show Director
Digital Dealer - November 2017 - 3
Digital Dealer - November 2017 - Don’t Be a “Management Jerk” and Steps for Handling Them!
Digital Dealer - November 2017 - 5
Digital Dealer - November 2017 - Attempting a No-Huddle Offense? How’s That Working for You?
Digital Dealer - November 2017 - 7
Digital Dealer - November 2017 - 8
Digital Dealer - November 2017 - Is a Financial Partnership in Your Future?
Digital Dealer - November 2017 - 10
Digital Dealer - November 2017 - 11
Digital Dealer - November 2017 - 12
Digital Dealer - November 2017 - Fallacy
Digital Dealer - November 2017 - 14
Digital Dealer - November 2017 - 15
Digital Dealer - November 2017 - You Can't Take a Train 500 Miles on 400 Miles of Track
Digital Dealer - November 2017 - 17
Digital Dealer - November 2017 - 18
Digital Dealer - November 2017 - 19
Digital Dealer - November 2017 - 4 Tech Tools That Decrease Employee Turnover
Digital Dealer - November 2017 - 21
Digital Dealer - November 2017 - Organize for 2018 – Expect Greater Efficiencies and Profitability, Fewer Surprises
Digital Dealer - November 2017 - 23
Digital Dealer - November 2017 - 24
Digital Dealer - November 2017 - Retail Warranty Reimbursement: Leveling the Playing Field
Digital Dealer - November 2017 - Cracking the Car Code on Selling to the #1 Buyer: Women
Digital Dealer - November 2017 - 27
Digital Dealer - November 2017 - Professional Voice-Over Secrets!
Digital Dealer - November 2017 - 29
Digital Dealer - November 2017 - CAMERON JOHNSON Dealer Principal, Magic City Ford Lincoln
Digital Dealer - November 2017 - 31
Digital Dealer - November 2017 - 32
Digital Dealer - November 2017 - 33
Digital Dealer - November 2017 - 34
Digital Dealer - November 2017 - 35
Digital Dealer - November 2017 - When It Comes to Social Media... Don't Step on a Rake
Digital Dealer - November 2017 - 37
Digital Dealer - November 2017 - The Online Shopping Experience Has Radically Changed. Your Dealership Can Reap the Benefits.
Digital Dealer - November 2017 - 39
Digital Dealer - November 2017 - The New Car Manager's Modern Guide to Merchandising
Digital Dealer - November 2017 - 41
Digital Dealer - November 2017 - Top 3 Information Technology (IT) Recommendations for Stability and Increased Productivity at Your Dealership
Digital Dealer - November 2017 - 43
Digital Dealer - November 2017 - That’ll Bee $128 Forda Tech Ta Lookatit - Ouchie
Digital Dealer - November 2017 - 45
Digital Dealer - November 2017 - Only 5 ½ Cents- Per-Mile to Maintain a $50K Machine! Wow!
Digital Dealer - November 2017 - 47
Digital Dealer - November 2017 - 48
Digital Dealer - November 2017 - Cover3
Digital Dealer - November 2017 - Cover4
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