NEGOTIATIONS
According to Mike, to be a great purchaser, you must be a great negotiator. Mike explains that a purchasing agent is measured on price variance. In other words, this is the difference in what the cost was and what the cost is now with savings. He has a goal to save at least 10 percent annually. An example at Swisher Systems is the cost negotiated from the printer of its catalogs. In 2004, it cost $1.86 for each catalog. Currently the cost is $1.38 and the quality has dramatically increased. This was a savings of $10,000 a year. Another example of negotiation that many buyers are not aware of is with United Parcel Service. Some inexperienced buyers think it is a set price; however, if large volume is done, the cost can be negotiated. Swisher Systems uses UPS for inbound and outbound; therefore, it was able to negotiate better prices.