Mastering Smart Buying: Avoid Hidden Costs and Optimize Your Purchases

Ever wondered how to turn a seemingly great deal into a financial pitfall by not reading the small print? Join us as we unravel the secrets of smart buying, where we promise that by the end of this episode, you’ll be armed with the skills to avoid hidden costs and make informed choices both as a savvy consumer and a strategic business professional. From selecting the right delivery options to making sure you're buying from trustworthy sellers, we tackle the nuances of online shopping that can make or break your purchasing experience. Listen closely to learn why reaching out to sellers can be your best strategy in ensuring you get exactly what you need.

In our exploration of optimizing purchases, the focus shifts to the art of strategic planning. We delve into the importance of market research and negotiation, stressing the value of confidentiality and understanding your rights as a consumer. Whether you're a business looking to manage supplier relationships or an individual overwhelmed by information overload, we've got strategies to steer you clear of impulse purchases. And for businesses, we’re shedding light on how ethical practices and sustainability aren’t just buzzwords—they’re essential in enhancing your brand reputation. With practical advice on every front, this episode is your guide to mastering the buying process with confidence and clarity.

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Chapters

• 0:02 Smart Buying
• 10:38 Optimizing Purchases Through Strategic Planning
• 16:50 Effective Buying Strategies Guide

Transcript

Speaker 1: 0:02

Hello, tony Hines. Here You're listening to the Chain Reaction Podcast, all about supply chain advantage Great episode coming along in just a moment and we're going to discuss buying decisions and how we make buying decisions. And it's useful if we're a consumer to think about these processes, but it's also useful if we run businesses or we procure goods on behalf of a business, and that's what we're going to be looking at. So stick around, stay tuned and find out more. Now. Expectations have risen over the past few years and we all expect to order things online and have them turn up within a day or so, two days, three days, days, but maximum inside four or five days and some of the options we have we can pay for those deliveries in some cases if we want it immediately, or we can get it free, or we can take a subscription model, as in the case of amazon prime, and we can pay an annual fee and just have everything delivered in as short a time as possible. Now, that's very attractive for some people, but it all adds up and the cost adds up. If you're ordering lots of goods, of course a subscription model can make sense, but if you're just ordering at certain times of the year, then a subscription model probably doesn't make sense and you're probably better paying as you go or taking the free options when you get them. And we're going to take a look at some of those things in this episode today.

Speaker 1: 1:37

Now, we all like a bargain, don't we? So we'll have a look around, we'll look on the website and we'll see prices and we'll price compare. We might even go on to comparison websites Idealo and various others, compare the price and take a look and see where we can get the lowest price, and sometimes we're hooked in by a low price. All we see yep, we're going to buy that standard item that we want. Several retailers have it on sale. Which is the cheapest price? And we might go for the cheaper price. And if we're lured in if something's $70, we might say, ok, I'm going to go for $70 as opposed to $75, because that's the cheaper price.

Speaker 1: 2:16

But beware those of us perhaps a little older will remember always read the small print. And that goes for websites too. When you look on a website, you want to ask yourself well, is this the delivered price to me? As a purchasing professional, you'd probably look at that. But if you're not a purchasing professional and you're just a consumer. You may not. And you might be lured in by this lower price and you go OK, I'm going for the £70 or the $70 price. And then you read the small print and it says £5.95 or $5.95 delivery. Well, that's just gone above the other price of £75 or dollars. And if you look at the delivery cost, it says free at £ 75, but you went for the cheaper one at 70 and then had to pay 5.95. You've just done yourself down because you paid nearly a pound or a dollar more for the item you wanted. So it always pays to read that small print.

Speaker 1: 3:16

It also pays to look and make sure that the trader is trusted. In other words, don't be diverted to a trader perhaps that you've never dealt with before, when you had good service from somebody else, just because it's a couple of dollars cheaper. That will not make sense and you could be risking all, because it might be not all it seems. It could be a fraudulent trader trying to set up to steal legitimate business away from others. And these are the things that have to go through your mind when you think about these things. Trust is one thing. We go onto websites. We need to trust those websites. We need to make sure we're dealing with the people we think we're dealing with too, that it isn't some kind of cloned website that's trying to steal business away from the legitimate brand. There's plenty of that around. And then we need to think about are we getting the goods that we want?

Speaker 1: 4:12

You might see two prices for the same item and you go for the cheaper one, but it may be you didn't read the small print, and in the small print it says you know, this is a refurb or this was an unboxed item, or this is second hand, and that's why you're getting the cheaper price. So always read that small print. The small print is important. Now, how many of us also, when we go for the delivery options, always go for the fastest, even when we don't need it? We don't need fast delivery. We could have it in a couple of days, three days, four days, and it would make absolutely no difference to us whatsoever. Well, if it's cheaper to have a later delivery, you might as well do that and take the lower delivery cost. No point in paying for the delivery to have it here tomorrow and you're not going to use the item tomorrow, you don't need it until next week. You might as well go for the slower delivery and get yourself the item in good time but not necessarily in the fastest time and that might be cheaper for you too. So that's another important consideration when you're purchasing goods.

Speaker 1: 5:20

Some people, of course, might shop around, have a look at different websites and then they might decide to get a phone number for the trader, ring them and find out more detail about the item. Well, that's not a bad idea if it's something that you need to a certain specification and you want to make sure you're getting the right product at the right specification. Give the trader a ring, speak to them or email them if there's an email point, or engage in chat, if there's chat online. I know it's frustrating. Some of that chat online doesn't work very well and it's problematic, and sometimes they go into a loop where they drive you loopy in the process because they're not answering your question when you want it. So you have to be cautious and you have to not pester people. You don't want to be ringing them up. If you know that's exactly the product you want and they're a trusted trader that you've dealt with before. You might just want to go ahead and book it and buy it. So you have to be careful in the process, but not waste your time and everybody else's time. If you know exactly what you want, you might also want to look at the service elements of the arrangement, the contract, and by that I mean one of the most important, perhaps is supposing the goods turn up but there's something wrong with those goods.

Speaker 1: 6:37

Can you return them and what are the conditions of return? Do you have to pay for that return? Is it free to return? Does the retailer make it easy for you to return? Some retailers have to pay for that return. Is it free to return? Does the retailer make it easy for you to return? Some retailers do, of course. They provide you with labels for returns, especially online retailers, and they make it as easy as possible for you to drop that return to a delivery point where you can get it back, or they'll pick it up directly from you and they'll provide a refund, or they'll provide a replacement product. But it's important to know what the options are, because you don't want to find that you could have gone with a trader that had a better terms of service in the contract and you chose somebody else simply because it was cheaper, but you might end up with a lot more hassle if you can't return the goods in the same way you could to the other trader, you might have to end up picking up a cost. But it's important to think about returns even at the point of purchase, so you know what the agreement and what that service agreement is likely to be.

Speaker 1: 7:38

And then do they give guarantees? Now sometimes you get product guarantees, and the product guarantees are important. They come from the manufacturer and they will specify replacements in a year, two years, three years or even longer. In some cases they might give longer guarantees. So they're the product guarantees. But then the retailers themselves will also give guarantees, and some of them give those guarantees free for a set period of time and some of them charge a fee for longer periods of time. Now, if it's an expensive item that you buy, it might be worth looking at the options on the guarantees, because if you're paying $500 for something or $1,000 for something, then you might want to know that, a you can safely return it and B if it's defective in any way or there's a problem with the item further down the line, that you can return those goods and get full refund or replacement.

Speaker 1: 8:38

So you need to read the small print. That small print is very important, apart from the goods themselves, of course. When you purchase something online or anywhere, make sure you keep that purchase receipt, because that's proof of purchase. And you might be asked for proof of purchase if you return goods to a retail store or if you return goods online, and there might be numbers on the receipt that you have to quote to the retailer in order to process the return. So keeping hold of the paperwork is very important. Don't just discard it. It might be in the package. Don't discard it with the packaging. And the other thing is don't throw away the packaging immediately when you receive goods, because you might have to reuse that packaging to parcel up the goods again, and particularly if it's a product with a box and guarantees in it, then you'll need the original boxes to send the goods back. So it's all very important that you keep the box, the proof of purchase, the receipt and any invoices that you get. Of course, most of that might be online these days, but even so, make sure you file away the online purchase invoice, the online order and the online receipt when you get it.

Speaker 1: 9:55

Now here's some general advice on how to optimise your buying decisions, whether it's online or face-to-face, and whether it's a personal purchasing decision you're making, or whether it's a personal purchasing decision you're making, or whether it's a business decision. These strategies should help you think about what you need to think about, so here are some key tips to help you make smarter purchasing choices. The first thing, of course, is to understand your needs. Clearly define what you need before you're making a purchase, and that will help you avoid unnecessary or impulsive buyers, and we're all open to that. We all tend to make impulsive purchases, sometimes even when we don't mean to Conduct market research.

Speaker 1: 10:38

Investigate the market to understand the available options, pricing trends and the reputation of suppliers, and this knowledge can help you find the best deals and avoid overpaying. Set a budget, establish a budget and stick to it, and that'll ensure you don't overspend and it helps you prioritise your purchases. The one thing I'd add never share that budget with anybody else. It's always best to keep, as they say, your powder dry. So if you're in a negotiating situation, you don't want the other person knowing what your budget is. You need to keep that to yourself. Evaluate the alternatives. Compare different products or services to find the best value for your money.

Speaker 1: 11:20

Look at factors such as quality, price and after-sales service, as well as guarantees. Negotiate, always negotiate. Don't hesitate to negotiate with suppliers for better prices or terms. Effective negotiation can lead to significant savings. Haggle if you need to Make sure that you can justify the price that's being paid and get the supplier whether that's a retailer, a business-to-business situation or a trader that you're dealing with make sure that they can justify the price to you and maybe they'll throw in some other things. If they can't reduce the price significantly, they might offer you a better guarantee, better after-sales service or they might throw in some extras. So it's always worth taking a look at negotiation and leverage technology. Use digital tools and platforms to streamline that purchasing process. That can include procurement software, digital adoption platforms and inventory management systems. Using tech is a smart move even to do your research in the first place and look at the available options. Technology will save you a lot of footwork, it will save a lot of angst and it will give you a wide range of information that you need to make the decision. Consider sustainability Opt for products and suppliers that prioritise sustainability and ethical practices. This not only supports responsible businesses, but it can also enhance your brand's reputation if it's a business-to-business purchase that you're making.

Speaker 1: 12:59

Monitor and review Regularly, review your purchase decisions and processes to identify areas for improvement, and that will help in making more informed decisions in future. By following these strategies, you can optimize your purchasing decisions, ensuring you get the best value while aligning with your overall goals. Now, of course, whatever it is that you do whether you're buying a product as a consumer or you're buying as part of a business, a procurement strategy, a purchasing item the processes are similar but they might be more planned in the business-to-business sense, and there'll be procedures and processes that you'll need to follow, need to follow and, of course, those standard operating systems that you have to procure items for the business and the processes that you go through have to be well thought out. But, of course, even in the best planned businesses, sometimes things go wrong. Usually, if you've been working with suppliers for a long time and you have a good relationship with a supplier, they'll sort it out or help you sort it out, so that everything is resolved to everybody's satisfaction, and that's a good way to operate. But sometimes things go wrong and it might just be a one-off purchase that you've made and there's no solution apart from legal redress.

Speaker 1: 14:25

And then you need to know your rights. You need to know which laws apply. If you're a consumer, there'll be Consumer Credit Acts. If it's a credit transaction, there'll also be your rights as a consumer under things like a Sale of Goods Act or there'll be Consumer Rights Act, and you'll need to follow those through in detail. Now. It may be different in your country, so you'll have to look those through in detail Now. It may be different in your country, so you'll have to look up what those particular laws are and make sure that you're operating in line with the laws applicable to your country.

Speaker 1: 14:58

And if it's a business-to-business dealing, then again it will be international trading laws if it's international, or it will be country-level laws if it's international, or it will be country level laws if it's within country. So there are regulations and support that you can access if dealings go wrong and if you have to make legal redress and often that legal redress is quite a simple process process For small amounts there are special rules usually and it won't cost much to actually follow the procedure to get things put right. But that's a last resort, isn't it? You only go to that if you can't resolve it between the buyer and the seller and on most times, most occasions you will be able if they're legitimate traders and they have a business ethic you will be able to resolve it without redress to the law. But other times you may have to go and get legal advice. So, whichever way it goes, there are solutions. Never panic, think it through. Never panic, think it through when it comes to trade agreements that you've made and you've procured items and you've purchased goods. There'll be a contract and most of the arrangement will be dealt with through contract law, and contract law is very detailed. There are specific rights that buyers and sellers have and there are procedures that they have to follow when the case of disputes, and so it's a very clear process. And can you believe it? I spent a whole year doing contract law in an early part of my career. Yeah, very interesting you Now, in today's fast-paced world, making informed buying decisions is critical for both consumers and businesses, and while the end goal is similar acquiring the best product or service for the best value the processes and considerations differ significantly between consumer buying decisions and business-to-business buying decisions, and we've explored some of those differences as we've talked through in this episode.

Speaker 1: 18:04

But let's just recap In consumer buying decisions. The first step is recognising a need or a problem that requires the purchase, something we want, and this could be anything from a new smartphone to a pair of shoes. We search for information. We'll look online, we'll read reviews, we'll read magazine articles, we might read newspapers, we'll have a look in shops, we'll compare prices and we'll ask our friends to recommend something. Then we'll evaluate those alternatives by comparing the different products based on factors such as features, price, brand and reputation. After the evaluation, we've got a range of options and we make a final decision on what to purchase, which product or service we're going to actually buy. And after we've bought it, we reflect on the purchase. Are we satisfied with the choice? Would we buy the same brand again, and so on.

Speaker 1: 18:58

And sometimes, if we buy big ticket items, we have what's known as cognitive dissonance. It means that you're not sure you've made the right decision, in simple terms, and then we might take it back so we might return the product. Some of the things we might do and some things to avoid impulse buying. Try to avoid impulse buying. Make a list, plan the shop, plan the process that you're going to follow and stick to it. And consider waiting 24 hours before you make non-essential purchases, and that way gives you time to think before rushing in. This is why, of course, that sellers online and elsewhere try to give you time limits. They try to impose on you artificial time limits to compress your decision, because they want that decision faster. They want to be able to nudge you into buying their goods or services, and sometimes there's a bit of pressure applied.

Speaker 1: 19:54

We also have the problem that there might be too much information. It's overwhelming when we look at all the options that we've got in front of us and we might see lots and lots of reviews and we might do comparisons, but we're still in a quandary about what to buy, and that can be overwhelming. So try to narrow things down all the time. Word of mouth recommendation is always great, whether you're a business or a consumer, and that's really important. Understand your rights. Understand the retailer's return policy, understand the business supplier's return policy before you make the purchase. What kind of service and support are they going to give you? Keep receipts and packaging in case you need to return the item, and what sort of guarantees are they offering, because that might make the difference of who you choose, as we've discussed a little earlier in the episode and if there are defects, we need a process to deal with them. Contact the customer services department of the organisation immediately, or your supplier contact, if you're a business, and record and tell them about the issue.

Speaker 1: 21:01

Often you can photograph if it's damaged goods and it arrived damaged, photograph it and just send it off and say, look, this happened and package was damaged, so I'd like to return it. Thank you, and we've all had episodes like that. It just happens, it's part of life. There might be something that's gone wrong somewhere along the way and it's not always the supplier's fault. It might be a carrier that's damaged the goods in transit, accidentally, of course. So it's then knowing who to claim from. But you can sort it out with the supplier, whoever it is, whether you're a consumer or whether you're a business, and tell them what you want. Do you want a replacement or do you just simply want a refund and you're trying to get hold of, and we might have a specification that defines exactly what it is we want to buy.

Speaker 1: 22:02

We search for suppliers, we put forward a proposal, we ask for quotes, bids from suppliers and we compare them and narrow down our options. We select a supplier after a thorough evaluation and then we finalise terms of agreement, the contract. We place an order, negotiate terms, finalise the contract, both parties agreeing to it, and we place the order with our chosen supplier. Finally, businesses will assess the supplier's performance over time and the quality of the products or services received from them, and that will decide whether you keep them on your list of suppliers or whether you delist them. The common issues that we look at are vendor reliability ensure suppliers are reliable, trustworthy and always take up references. Ask other people if they use that supplier. Find out all about the supplier before you even do business with them. Do your desk research and do your face-to-face research and just try one or two lines from them before you go into any major big contracts with them.

Speaker 1: 23:06

Contract management, of course, is essential. Use clear and comprehensive contracts to avoid disputes. Think about what could go wrong and get it in the contract. Ensure all terms and conditions are well documented, and then look at the logistical challenges involved. If it's a global supplier, are there going to be any shipping delays? Are there going to be disruptions that might interrupt or cause a problem for you in getting the goods at the time you want them? So you need to have contingency plans in place and you need to have options.

Speaker 1: 23:38

Building resilient supply chains is about having those options. It's about spreading the risk and it's about knowing what to do if something goes wrong. Have you got a backup plan? And, of course, returns and replacements. Have clear procedures for handling returns, replacements and disputes, and always maintain an open dialogue and communication process with your supplier. If you have to seek legal redress, then you need somebody that knows the law relevant to your particular purchasing decision. You might have that expertise in-house or you might have to buy it in.

Speaker 1: 24:13

Making informed buying decisions is essential for both consumers and businesses, but by following what we've talked about in this particular episode, I'm sure you'll have a better experience in the buying process. It will save you time, money and stress. And one final thing of course, there's always insurance. Usually, a supplier will have insurance on the goods up to the point you accept responsibility for those goods, and we have specific terms in shipping contracts, for example, such as cost insurance and freight, and that means that the supplier might be responsible for the cost, insurance and freight. Or it might simply be that the supplier puts the goods on a ship which is free on board and you take the responsibility for the cost, the insurance and the freight. So make sure you've got the right terms in the contract for your particular business.

Speaker 1: 25:09

Well, that's it for this episode. I hope you've enjoyed the episode. I hope it's given you something that you didn't know before and hopefully, if you follow some of the processes in some of the discussion in the episode in your business-to-business situations or indeed in your own consumer experiences, then you might have that better experience that we talked about just a couple of minutes ago. If you like the podcast, don't forget to subscribe to the Chain Reaction Podcast on your favorite platform, and then you'll be first to know when episodes are coming your way. Thanks for stopping by today. I'm Tony Hines. I'm signing off and I'll see you next time in the Chain Reaction Podcast. Bye for now.