Cutting Costs or Just Cutting Quality? Raising Revenue While Keeping Product Satisfaction
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Every business deals with the problem of increasing revenue while reducing costs. In reality, it makes sense to try and make more money each year with fewer expenses. However, many times businesses go about this task the wrong way and end up cutting quality. To avoid doing so, you should implement these four strategies to reduce your costs while maintaining product satisfaction from your customers.
Automate Everything You Can
Computers can do so many things much faster than people and usually without the same amount of mistakes a human would make. Automation is the key to surviving the 21st-century business environment. Take some time to look over your entire production process from start to finish. Look for areas that can be automated to help reduce costs without altering the end product. For example, instead of paying employees to count stock and place new orders, you should employ computer software that keeps a record of your stock in real-time and places new orders when certain products reach a set threshold. Computers will save you money as they finish the job faster and more accurately than a human employee could.
Consider Supplier Bulk Discounts
All businesses have suppliers that provide them with the materials their business needs to function. Over time as your business expands and needs more supplies, your supplier list gets larger. This can have all your supplies spread out among many different suppliers. To simplify your supply process and save some green in the process, you should consider ordering as many supplies from a single supplier as possible. For example, a stainless steel mesh screen supplier will likely be able to supply you with other parts for your production line as well. Instead of ordering these supplies from different suppliers, pick one supplier who can provide you with as many materials as possible. This will likely reward you with volume discounts from these suppliers.
Resize Your Shipping Boxes
Shipping costs can eat into the profits of your business. With so many consumers ordering products online, it’s likely that you regularly ship products to consumers. When you ship those products, the weight and the dimension of the box are taken into account in the shipping fee. Take some time to evaluate whether or not your boxes are an ideal size for the products that you ship. By just shaving a few inches off of a box height, you can save yourself some extra dollars on each shipment you do.
Negotiate New Prices
While it may be easier to stay with the same provider for your needs, that is not always the most cost-effective thing to do. If you use the same supplier for a large number of products, consider negotiating new lower prices. If the supplier does not agree to lower prices, look into other suppliers who can provide the same materials at a lower rate.
Cutting costs doesn’t mean that you need to offer your customers a lower quality product. Rather, cutting costs is all about being cost-effective with the expenses that you have. Be sure to utilize the four strategies above to save your business some green this upcoming year.
Anita Ginsberg is a freelance writer from Denver, CO. She studied at Colorado State University, and now writes articles about health, business, family and finance. A mother of two, she enjoys traveling with her family whenever she isn’t writing. You can follow her on Twitter @anitaginsburg
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