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2. More aggressive management of payables. This is the same concept as receivables. If you average 45 days, can they be moved to 50 days? Do not expect to take a vendor from 45 days to 90 days, and avoid not paying your vendors. No payment for several weeks gets suppliers nervous. Pay all of your vendors on regular intervals; just pay them a little less often. Again, take "baby steps" with everyone. And remember to oil the "squeaky wheel."
Boost Your Profitability
3. Get written, competitive bids for all vendor services: printers, fulfillment house, etc. It takes time to do written, competitive bids, but it can really pay off. Develop a negotiating strategy for each type of vendor. Tell them what you want: great pricing, great quality and outstanding customer service.
While you can use a low-quality vendor to negotiate a good price from a high-quality vendor, do not move to a vendor with a poor-quality track record. During the process of meeting each potential new vendor, you should be marketing your publishing company:
- Is your book a great-looking product?
- Is it the leader in its field?
- Do you pay your vendors on time?
- Do you have a huge volume of printing?
4. Sometimes you may be in the fortunate position of having several high-quality, potential vendors bidding for your work. Give them feedback, and ask for a lower price. Wait until you hear them say, "No." Then, you might want to ask for non-price concessions such as payment terms or help with financing your publisher-owned paper inventory (see below).
5. Purchase your own paper to avoid markups from printers. I have heard it said that some printers make more money from selling paper than from printing. In order to purchase your own paper most profitably, as part of the competitive bid process discussed above, you should try to negotiate away printer storage charges.