How to understand purchasing through the eyes of the buyer and seller: Buying the right book on manufacturing techniques can be much less expensive than even one mistake of using the wrong process or vendor.
At some point in the development of our inventions, we have to purchase parts or services. The most crucial purchases occur when we are producing a finished product for sale; every two dimes spent needlessly means we have to add a dollar to our selling price if we are going to cover all of our costs and make a reasonable profit.
Even if our intention is to license our patent, we may produce a limited quantity to demonstrate that our invention serves a ready market. It’s a lot easier to find a licensee if you can prove your invention is selling.
Several years ago, I started a prototyping and short-production-run business. At its peak, I had 12 employees. I managed it for six years, but the inventor in me itched for greater adventure. When I had an offer I couldn’t refuse, I sold Short-run Precision Fabrication and went back to designing tooling and processes for an aerospace manufacturer.
Earlier in my career, I was a manager of material for another aerospace producer. The purchasing function was one of my responsibilities. So I’m going to share what I learned about purchasing from the viewpoints of both the buyer and seller of production parts and services.
Learn the buying process
The buying process begins with negotiating the price. Note that I said negotiating, not haggling.
If you’re dealing with an ethical vendor, there shouldn’t be any back and forth on the price. But some vendors justify fudging their pricing just a bit. Professional buyers are protected by knowing the most suitable vendors for their needs and being able, you might say, to play one against the other. These buyers usually solicit three price quotes from three different vendors.
Read more: Negotiating With Vendors
Image courtesy of inventorsdigest.com
