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In parts one and two of this series, we shared how some farmers force retailers to bid and compete for their business, while others maximize the retailer relationship. In part three we’ll focus on what you may be able to get from retailers, beyond a lower price.
Why should that matter? Suppliers often hesitate to lower prices, says Mike Boehlje, ag economist at Purdue University, because they have laid in inventories at costs that provide little flexibility without dramatically compressing their own margins.
In order to offer farmers more than just a price, Boehlje suggests specifics on what to seek, so they can arm themselves in making a decision on more than just price. Here’s a list of additional specifics to see if one rises to the top:
Product performance. Effectiveness of the product in enhancing or protecting output (yield, rate of gain) and evidence or documentation supporting the performance claims.
Product price. Net price including transportation and shipping charges and any service fees.
Quantity or volume discount. Any price discounts or service fee reductions that depend on quantity purchased, or packaging or bundling with the purchase of other inputs.
Storage, delivery time and conditions. When and how the product will be delivered, storage arrangements, and penalties or backup if delays occur.
Local contact. Name and contact information (cellphone, email, etc.) of the specific person to contact if problems occur in fulfilling the purchase agreement or in the efficacy of the product.
Application services. Cost and performance specifications including timing of any application or other services.
Financing terms. Financing or credit terms offered, including cash discounts, interest rates, repayment terms and the approval process.
Warranty. Performance guarantees and terms of reimbursement for nonperformance, including documentation requirements and party responsible for servicing warranty claims.
Technical documentation. Product performance documentation and details of product specification, including quality characteristics.
Compliant response time and process. Procedure for filing complaints concerning product or service efficacy or effectiveness, including process and time delays in response or resolution.
Technical support. Availability of technical support to answer questions concerning product performance and efficacy, including a process to contact technical support personnel.
Information services. Availability and provider of any information or data analysis services, including fees charged for such services and a contact person.
For a sample specification sheet for obtaining bids and a weighted specification analysis tool to look beyond price, download a sample document below.
Next: How one cooperative helps farmers market grain and lower costs per bushel
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