Does your vendor selection process help you stay on budget? Or, do you pay more than you should for vendors?
A good vendor selection process can help you get the best vendor at the right price – helping you stay on budget. However, if your vendor selection process is inefficient, you could be paying more than necessary for vendors. As such, you could have higher operating costs, which negatively impact your revenue.
How can you improve your vendor selection process to help you stay on (or even under) budget?
By creating a vendor selection process that looks at a variety of vendors, reduces administrative work, and makes comparison easy. That way, you can find a great vendor at an even better price.
Wondering how you can get your vendor selection process ready for the budget season? Read on to find out.
Step 1: Expand Vendor Search
The first way to get your vendor selection process ready for the budget season is to expand your vendor search. With more vendors to choose from, it’s easier to get a better price.
When you need a new vendor, you probably look in the same areas every time. You might look at vendors you’ve used in the past. Or, you might rely on recommendations from other property management professionals.
However, when you rely only on the small vendor pool in your network, it’s difficult to get the best vendor price. Vendors you’ve already used may overcharge you because you’ve been happy with them in the past. And, recommended vendors may give you a high quote because they think you won’t shop around after getting a recommendation.
As such, having a narrow vendor search can cost you significantly. If you overpay vendors by thousands each year, you have to devote more of your budget towards vendors. Then, you have less money for everything else you need to do.
And, your high vendor operating costs can cut into your revenue.
To avoid being overcharged by vendors, you should widen your vendor search. Instead of relying on known vendors, you should look at a variety of vendors. While you could Google search for vendors, this can be time-consuming. And, there’s little guarantee that you’ll find a high-quality vendor this way.
Instead, you could use RFP automation software with a trusted vendor database. So, you can browse vendors throughout your area – without having to spend hours searching the internet. Plus, you’ll have access to vendor reviews, service history, and more. That way, you have everything you need to select a great vendor at the right price – all in one place.
Step 2: Reduce Administrative Work
Reducing unnecessary administrative work is another way to save money and get your vendor selection process ready for budget season.
The competitive bid process can require a lot of administrative work. You have to write the RFP, which can take hours (or days). Then, you have to communicate with vendors who have questions about your request. Or, who is unresponsive or forget to submit their proposal on time.
Altogether, the vendor selection process can take up weeks of you and your team’s time. The more time you spend on the process, the more costly it is in terms of administrative work. So, a time-consuming vendor selection process can increase the overall cost of each vendor – increasing your operating costs. And, potentially putting you over budget.
To save money on administrative work for the competitive bid process, you need to streamline the RFP process. While hiring additional team members could make the process faster, it won’t lower your operating costs.
However, RFP automation software can. With pre-made request templates, you can write an RFP in minutes. And, this software automates time-consuming vendor communication – like follow up and replacing unresponsive vendors.
That way, you only spend minutes on the vendor sourcing process – saving you money. With these reduced vendor sourcing costs, you can focus on other tasks that generate more revenue for your building.
Step 3: Compare Vendors Side-By-Side
Along with expanding your search and reducing administrative work, comparing vendors side-by-side can help you save on vendors and get ready for budget season.
Getting the proposals you need for your vendor search can be challenging. Equally difficult is choosing the right vendor. While every vendor submits a proposal, each proposal can look vastly different. And, include completely different information.
For example, the most important vendor characteristics for you might be price, the scope of work, and clean up. But, out of the three proposals, each proposal mentions those characteristics in different parts of the proposal. So, you have to spend hours meticulously combing through the proposals to find what you need.
And, after all that work, you might not even find what you need. So, you have to choose a vendor based on incomplete information. This can lead to you choosing the wrong vendor – at the wrong price.
Instead of going through all this work for potentially subpar results, you can use RFP automation software that makes comparisons easy. Once your vendor proposals come in, this software automatically generates side-by-side comparison tables. So, you can see all the important vendor info – with just a glance.
And, this comparison makes vendor pricing transparent. You don’t have to worry about missing add-ons that drive the price sky-high after you choose a vendor. Instead, you can easily see each vendor’s complete price – making it simple to choose the vendor with the most competitive price.
With side-by-side comparison, you can choose the right vendor at the right price in minutes – helping you reduce vendor expenses and increase revenue.
Wrapping It Up
Selecting a new vendor can be a time-consuming, frustrating, and expensive process. With the budget season just around the corner, you need ways to trim expenses and boost revenue. Your vendor selection process is a great place to reduce expenses.
You can get your vendor selection process ready for the budget season by expanding your vendor search, automating communication to reduce administrative work, and comparing vendors side-by-side to find your next vendor at the right price. And, the easiest way to do these steps is with RFP automation software.
Looking for bid management software to help you get your vendor selection process ready for the budget season? Consider using Prism. With Prism’s Bid Management module, you can use a trusted vendor database, write RFPs from pre-made templates, automate vendor communication, automatically generate vendor comparison, and more.
Want to learn more about how Bid Management can help you? Check out our Find the Right Vendors at the Right Price for your Budget eBook to find out if you’re making common costly vendor selection mistakes.