As trade agreements become more and more a part of the consolidated purchasing arena - mistakes and redundant practices won't fly in productive business relationships
The precise numbers vary from study to study, but what's clear is that high SG&A expense on the part of the supply chain participants sourcing, managing, and settling trade agreements is primarily caused by all the parties speaking a "different language" when it comes to the marketing or sourcing, administering, and settling of trade agreements. In addition to high operating expense, there is an extraneous amount of "admin" and/or "marketing" fees. These fees are often artificially created by one supply chain participant as a charge to one or more of their trading partners in an attempt to recover their SG&A expense, or simply to capture additional profit. Whether these charges are legitimate or not depends on the supply chain, but, clearly, the additional expense is passed on through to the end user in the form of higher into unit cost or lower allowances or both. With VeriPerform, these extraneous fees can be reduced or eliminated altogether. As if the redundant expenses and processing fees aren't enough, there's the added reality that "double-dipping" (payment on the same transaction twice by a vendor) is still rampant. In some cases it's as high as 10%. Ten percent on $187 billion is a BIG number! VeriPerform has been conceived as an end-to-end solution. The current industry technology providers that attempt to address one or more of the failings of today's execution of the trade agreement life cycle, are in some ways, adding to the dysfunctional nature of the overall process. We address the entire life cycle with our VeriPerform solutions package. From sourcing to negotiation, from launch and transaction, to settlement and analysis, all functional steps are processed through one cloud based and integrated technology solution.
WE SUBMIT THAT THERE AREN'T THOUSANDS OF PARTIES SEEKING TRADE AGREEMENTS; THERE IS ONE TRADE AGREEMENT PROCESS THAT SHOULD BE ACCESSIBLE AND EASY TO USE
By containing all of the functional needs of the trade agreement life cycle within one integrated system, VeriPerform provides a significant reduction of SG&A expense to the user. The precise savings is really best determined by the party engaged, but savings of up to 80% is not an unreasonable estimate. For a large foodservice vendor with an SG&A expense line of $10 million, that could be $8 million returned to to the bottom line or $8 million more applied to attracting or retaining business. What is indisputable is that the common supply chain charge for "admin" or "marketing" fees can be substantially reduced or eliminated altogether. In the VeriPerform trade agreement platform, the costs of administering a trade agreement are simple and straightforward. Arranging all of the functions of conceiving, administering, and settling a trade agreement in one system assures standardization and eliminates redundancy of practices between and among supply chain trading parties.
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