Eight Money-saving Ideas for 2005

8. Reduce your cost of goods (COGS) as a percentage of sales. The No. 1 cost item on your P&L is product cost. In addition to proper inventory management (see No. 7), the two primary ways to reduce this cost are through negotiation and effective pricing. Negotiate thoroughly, and work closely with your suppliers. Since this isn’t an article on negotiating, I’ll give you just one idea to try immediately: Go to your top 10 suppliers, and negotiate a rebate program for this year. Make an agreement that if you spend x percent more with them in 2005 than you did in 2004, you’ll get 5 percent of the purchase value back at the end of the year.