Sell By Understanding Soft Costs

Filed Under (OP Sales Training) by Don on 13-11-2008

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If you’re not educated on selling to your customers on soft costs of doing business then you are loosing potential business every day. Soft costs are the costs incurred in the process of placing a supply order such as:

Product Selection
Vendor Selection
Price identification
Ordering
Receiving
Distribution
Charge back
Payment

Every company goes through most of not all of these steps each time they make a purchase. When analyzing these processes the average medium sized business spends as much as 18.5 hours of on the job time completing the process. If you assume an hourly pay rate of $12 an hour then that single order just added $222 to the cost of your business. If a company is buying supplies from an average of 4 vendors every month that is adding more than $400 a month in non-productive expenses to your operating costs. These soft costs can be easily controlled by procurement from a single source supplier.

I can promise you that our big box competitors are out in your market aggressively presenting this kind of cost containment information to your customers! You need to proactively discuss these transactional costs to your customers and show them how they can save these costs by doing business with a single supplier.

Think like a customer, be a consultant and demonstrate the value of doing business with you and your company. Understanding costs is part of this process. Good luck!

The last word: “Don’t just learn the tricks of the trade. Learn the trade.”– James Bennis

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