FOCUS ON COSTWATCH - GA SERVICE CUTS OVERHEAD COSTS
Discover how fellow GA members are reducing their overheads using the Association’s popular Costwatch service and learn how the Costwatch team can help you to purchase everything from utilities to deep-sea shipping that little bit more cheaply.
Every penny counts when it comes to running a successful business and there can’t be a GA member firm that would not relish the opportunity to knock a few pounds off its utility bills, material and shipping costs and all those other overheads that detract from the bottom line.
As a number of members have already discovered to their advantage, this is just what The Association’s ‘Cost Watch’ service can deliver. “We have many years of experience in negotiating the best possible contracts for the businesses that use our services and are as happy dealing with relatively small contracts as we are with extremely large ones” explains Steven Hendry of the Cost Watch service.
So how does it work? “When a member contacts us, our expert team will carry out a mini audit of their spending to ascertain those areas where savings can potentially be made,” explains Steven. In some cases where complex contracts are involved, a member of the Cost Watch team may need to visit the customer’s premises, but in most cases the business can be done over the telephone and by faxing through copy invoices for the services and products in question.
“We work closely with each individual customer to establish a clear brief as to exactly what it is they require before putting together a tender document for circulation to a number of different suppliers,” says Steven. The number of suppliers contacted will vary depending upon what is being purchased, but there are nearly always three or four and sometimes as many as twenty involved. The whole process will take around a month from start to finish and once a company is signed up with Cost Watch they can rely on the Cost Watch team to keep an eye on contract renewal dates and make sure that the following year’s contract is negotiated on time and to best advantage.
Cost Watch can assist with all aspects of procurement including overseas contracts and deep-sea shipping costs for importers and runs regular on-line auctions in this respect. It recently saved one importer £160,000 a year on an annual shipping bill of £500,000, however for most GA members its main areas of operation are telecoms, stationery, waste collection, cleaning materials, waste compliance, energy, carrier bags and print.
Thanks to the long experience of its negotiators, Cost Watch is able to suggest suitable suppliers and knows those that have a good reputation. However, as Steven makes clear, picking a supplier isn’t necessarily all about price and Cost Watch most certainly does not advise its customers as to which supplier they should use. “Putting a contract out to tender allows our customers to compare the prices of their existing suppliers with those of their competitors and may perhaps enable them to negotiate a slightly more favourable price with their existing suppliers, rather than swopping to someone new,” he says.
So what sort of savings can users of Cost Watch expect? This, of course, depends upon the size of the contracts in question, but they can be sizeable especially in relation to waste disposal – a big issue for many gift and home companies, especially those who import from overseas. Amongst those whose waste bills have been slashed are GA members Natural Products which has saved £2000, Fikkerts which has saved around £1000 and Opal London where a hefty £1500 was knocked off its waste bill. The latter has also benefitted from a further £400 off its combined utilities. Other savers are the costume jewellery company Cavendish French whose print bill has dropped by over £500 a year, thanks to Cost Watch, and Sevens whose phone bill is down over £150.
“These figures are just a tiny demonstration of the possible savings that Cost Watch can offer,” says Isabel I strongly urge members to investigate what it can do for them.”
The GA Cost Watch fee is an extremely competitive 15% of the projected savings in year one. This is an excellent deal as most consultancies charge around 50% of the first year’s savings. There is also a minimum fee of £50. “On average we can save our customers around 5% on their annual utilities, so unless a company is spending around £700 a year in this respect we are not really going to be able to help, although we can perhaps assist them to procure savings in other areas, such as print, where they may be buying in bulk,” says Steven.
The last word goes to Sam Green of the home accessory and gift company ‘Retreat Home’. This young business has saved some £957 on its print costs thanks to Cost Watch. “The money I save on Cost Watch is fantastic. The GA’s help and support has definitely helped me to develop my business,” she told giftwrap.
To find out more about Cost Watch telephone The GA on 0121 237 1149 or email: rebecca.balson@ga-uk.org
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