Tail spend, also known as indirect spend, refers to the small purchases that a company makes outside of its core suppliers. These purchases can add up to a significant amount of money and often lack the same level of visibility and control as direct spend. One solution for managing tail spend is to use a tail spend marketplace. A tail spend marketplace connects companies with a wide range of suppliers, allowing them to find the best prices and terms for their purchases. In this blog, we will explore how to maximize the use of a tail spend marketplace to better manage your company’s tail spend.
Establish clear guidelines and policies for tail spend
Before using a tail spend marketplace, it is important to establish clear guidelines and policies for tail spend.
This includes setting limits on spending, identifying preferred suppliers, and outlining the approval process for purchases. By establishing these guidelines, you can ensure that all tail spend is in line with your company’s overall procurement strategy.
Take advantage of the marketplace’s search and filtering tools
Tail spend marketplaces often have advanced search and filtering tools that allow you to quickly find the best suppliers for your specific needs. Be sure to take advantage of these tools to find the most cost-effective and high-quality suppliers.
Negotiate terms and prices with suppliers
The marketplace provides you access to a wide range of suppliers and thus you can negotiate for the best terms and prices. Negotiating with suppliers can help you to get the best deal possible and make your tail spend more cost-effective.
Track and analyze your tail spend
A tail spend marketplace allows you to track and analyze your tail spend in real-time. This can help you to identify areas where you can make improvements and reduce costs. For example, if you notice that you are spending a lot on a specific category of products, you can take steps to reduce your spending in that category.
Encourage employee participation
Encourage employees to use the marketplace for their purchases. This will not only increase the visibility of tail spend but also ensure that employees are finding the best deals and suppliers, thus reducing costs.
Using a tail spend marketplace can help your company better manage its tail spend and reduce costs.
By establishing clear guidelines, taking advantage of the marketplace’s tools, negotiating with suppliers, tracking and analyzing your tail spend, and encouraging employee participation, you can maximize the use of a tail spend marketplace and achieve significant savings for your company.
