Don’t Let Cost Creep Happen in Your Contracts

You can get off the roller coaster of complex indirect supplier expenses.

June 21, 2022

Managing a business

This article is brought to you by Fine Tunefinetune-color-tagline-220.jpg

ALEXANDRIA, Va.—The operational responsibilities of a convenience retailer are growing increasingly complicated and demanding. Expenses across the board are rising with inflation, supply disruptions are persistent, and finding and retaining labor is difficult.

On top of these complex issues lies the ultimate responsibility of staying profitable, and keeping an eye on the business’ bottom line is more important than ever.

“Convenience retailers are faced with managing indirect expenses for uniform rental, waste disposal and recycling, pest control, and security and guard services, across multiple suppliers,” said Rich Young, vice president of marketing and communications, Fine Tune, which provides indirect expense management services. “But many convenience retailers are inevitably in a situation we call a ‘good contract, bad deal’ with these indirect suppliers.”

A “good contract, bad deal” situation means that even though operators implement strategies to reduce costs in supplier service contracts, the cost gap between negotiation and execution is significant—sometimes shockingly so, according to Young.

“The problem is that these indirect suppliers will find ways to increase profitability because they know the contracts aren’t being vigilantly managed,” explained Young.

Also according to Young, the behavior of these suppliers is increasingly contentious and non-client friendly, especially in waste and recycling.

“Convenience retailers are dealing with lots of players when it comes to operations, and if they aren’t managing them on a daily basis, cost creep will affect their bottom line,” said Young. “They need someone to go to bat for them and manage the game so they can get off the complex expense roller coaster and improve their bottom lines.”

But how can retailers find the time the meticulously manage these indirect suppliers? Fine Tune has answers.

This is the first installment of a two-part series about managing indirect expenses to help convenience retailers’ bottom lines. Look for the second installment in Thursday’s NACS Daily. For more information, visit