- Some suppliers in businesses with seasonal products may offer 'booking
programs.'
These also are sometimes called dating programs. These programs usually
offer substantial discounts on products if an order is 'booked' several
months in advance of the shipping date.
The discounts offered on 'booking programs' can be 15%–25% or more,
less than the regular cost.
Sometimes, further incentives are given such as allowing a month or two
extra to pay. There often is a graduated early payment discount schedule to
promote early payment after shipment is made.
Suppliers typically offer these programs to keep their factories producing
during slow periods.
The downside to the business taking advantage of a booking program is that
the minimum quantities required for the 'booking' often amount to several
months' supply of products.
This lowers product turnover and can affect profitability.
The foregoing is to illustrate that there are many combinations and variations
when it comes to pricing policies. It is important that the business compare the
advantages and disadvantages of each supplier's programs as it may relate to
the market served and a business's ability to use the program.
Develop a set of questions from the information listed above in the various
points. Ask the questions of your suppliers or kinds of suppliers.
- Advertising programs and support—nationally and locally
Supplier advertising programs assist in the development of consumer
awareness. They are very important considerations for the beginning business
as well as the existing business. These programs help to establish credibility for
the product in the market and they pre-sell the product.
This helps to reduce or offset the marketing cost to the business. However,
these programs always require a commitment from the business participating in
the program.