Turtles and Hares; Apples to Oranges

“You compare the tortoise to the hare.” Ancient proverb

A disturbing trend that I am seeing in the industry is spread sheet buying. Big surprise hearing that a salesman thinks that trend is disturbing huh? Although I have my selfish reasons, the real reason I find this trend to be a bad one has more to do with your business than with mine. What? Saving money is a bad trend for business owners? I guess I better explain myself here.

For clarification purposes I would like to say that not all spread sheet buying is bad for business. Comparing prices on the same items is smart business. Comparing prices on Heinz ketchup bottles is not where I find the issues. Comparing prices on IBP choice ribeyes isn’t where I have the problem either. That is just smart shopping. We do it all the time in all facets of our lives. That is a wonderful function of living in a free market society. This kind of comparison and competition is what makes our economy great.

Where I run into issues with spread sheet buying is when consumers and vendors compromise quality for price. What is the real cost of the goods you are purchasing? Is it a good price or a good value? While the two categories are not mutually exclusive, the overlap is not as vast as one might think. Many consumers have the attitude that green beans are green beans. News flash – green beans are not always just green beans. This is the trap that many consumers fall into on a regular basis.

When an organization makes price the primary impetus behind purchasing, it consciously or unconsciously communicates a number of things to its vendors. The primary being that quality does not make a difference – all that matters is price. Think about what is wrapped up in that message. Cut a corner or compromise product integrity, I don’t care just get it in here at the cheapest price. What are the longer term ramifications of that attitude? Quality slips. Drastically. Attitude dips. Drastically. When quality and service (the byproduct of attitude) drop it isn’t long before customer counts drop too. Who wins in that scenario? It’s not you, that’s for sure. You may win in the short run, but we aren’t in business for the short run, we are in business for the long run – at least I’m not, are you?

Quality aside, what other reasons are there for variations in prices for similar items? This is another spot where the value equation comes into play. What else are you buying with that case? On time delivery? Order accuracy? Credit terms? Industry experience? Vendor support with recipe and menu ideas? A partner in your business or a transactional vendor? These intangibles are all part of the price that you pay when you make a value exchange with a vendor. You can’t forget that when you are making your buying decisions, often times there is a whole lot more than just the product being delivered involved in the prices you pay for your goods. What is important to you? What else are you giving up when you pay that price?

I love competition and I love the free market economy. I hate short sightedness. Let’s make an investment in your business together.