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Cross-selling in purchasing: definition and important aspects for procurement specialists
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Cross-selling in a nutshell:
Cross-selling describes the strategy of purchasing additional, complementary products or services from a supplier that go beyond the original core business. For purchasing, this enables the use of existing supplier relationships to generate synergies and improved conditions through higher overall volumes.
Example: An automobile manufacturer expands its cooperation with an electronics supplier from pure control modules to display components, thereby achieving an additional volume discount of 7% on the total volume of EUR 2.5 million per year.
Contents
What is cross-selling in purchasing?
Cross-selling in purchasing describes the strategy of purchasing additional, complementary goods or services from the same supplier in addition to the originally planned product. The aim is to increase the overall value of the business relationship and exploit synergies. By identifying requirements that can be covered by the extended range of supplier management, companies benefit from more efficient procurement processes and potential cost savings.
Core elements of cross-selling in purchasing
Importance of cross-selling for purchasing
Cross-selling offers considerable advantages for purchasing. By expanding the purchasing volume with a supplier, better conditions and discounts can be negotiated. In addition, the administrative effort is reduced due to fewer ordering and handling processes. Close cooperation with suppliers also promotes innovation and enables faster reactions to market changes.
Cross-selling in purchasing: from traditional purchasing practices to strategic cross-selling
Building on the theoretical understanding of cross-selling in purchasing, the immense importance of this strategy for modern companies is evident in practice. While conventional purchasing processes are often isolated and focused on individual transactions, cross-selling opens up the possibility of deepening existing supplier relationships and expanding the purchasing portfolio in a targeted manner. In view of increasing market requirements and the need to optimize costs, a transformation from traditional to integrative procurement approaches is becoming essential.
Old: Traditional purchasing practices
Traditional approach: In traditional procurement, companies usually rely on individual suppliers for specific products or services. The focus is on comparing offers and selecting the most favorable supplier for each individual requirement. Tools such as manual ordering processes and separate contract negotiations are the norm. However, this approach leads to a fragmented supplier landscape and increased administrative costs. The main reason for this is a lack of synergy effects, as procurement is not bundled, which leads to missed opportunities in terms and conditions negotiations and a lack of process efficiency.
New: Cross-selling
Cross-selling: The modern approach focuses on cross-selling in purchasing, whereby companies strategically use their supplier relationships to procure complementary products or services. By expanding existing partnerships, requirements can be bundled and negotiating positions strengthened. Innovative technologies enable a holistic view of purchasing volumes and identify cross-selling potential. In practice, companies benefit from improved conditions through volume discounts, reduced transaction costs and closer cooperation with suppliers, which leads to innovations and competitive advantages.
Practical example: Automotive industry
A leading automotive manufacturer traditionally used separate suppliers for electronic components and mechanical parts. By implementing cross-selling strategies, the company began sourcing additional services such as maintenance and software updates from the same supplier that was already supplying the main components. This led to a 30% reduction in the number of suppliers, a 12% cost saving through bundled discounts and a 15% acceleration in development cycles. In addition, the closer cooperation strengthened innovation, which was reflected in shorter time-to-market for new models.
Conclusion on cross-selling in purchasing
Cross-selling in purchasing is a valuable strategic tool for optimizing procurement processes and supplier relationships. By bundling purchasing volumes with selected suppliers, companies can not only reduce costs and streamline processes, but also build strategic partnerships. Despite potential risks such as increased supplier dependency, the benefits of increased efficiency and improved negotiating positions outweigh the risks. In view of digital developments and sustainable procurement strategies, cross-selling will continue to gain in importance in the future.
