One of the recent discussions here in posts and comments has been negotiating lower prices from suppliers.  It all started with a guest post, Michelle Carter on “The Funeral Director Mindset”.  Several comments were added by our readers (and we appreciate comments!), including one I reposted as Jim Bauschke on “The Funeral Director Mindset”.

We’ve also received the following comments from our reader, Paul:

Bravo.  Yes, we should be thinking more outside of the box, and challenging our suppliers. Batesville is not the only game in town, and one should constantly be looking for better pricing.  As you stated, they seem to be scared to ask, or think it might cause a problem–who is the customer??  Companies like Dell and WalMart are great at playing the suppliers against each other to get the best price.  Granted we are not in the same position, but if we took those thoughts and mindset and applied them to our FH’s then maybe we could change the game.

I agree that what I call the ‘Flintstone funeral homes’ are going to blow away in the wind if they don’t see the change in the air.  I know, they will say (of course many do not even have computers, so it would be hard for them to read this) well, that new guy does not know what he is talking about.  Hmmm, I think because you are still using your business plan from 1890, might be a sign that things might not be so bright.

This is not meant to say all ‘traditional’ funeral homes are this way, but it is amazing as I talk with people like this how much they are the same.  Same small thinking, plenty of complaining and no one doing anything about it.  Why?  “Because the Wilbert guy or the Batesville guy is ‘my friend’ and have known him forever.”

–okay folks time to wake up–they really don’t care about you or your business.  Honestly, think about it–they care about their paycheck.  Well, that may not be bad, but WE should think about OUR paycheck also.

The ‘well it’s always been done that way’ thinking is what is killing them.  I say bravo to those standing up, and willing to dump their current suppliers for another.  The margins are shrinking, and FD’s need to wake up and shake the trees.

Okay off my soapbox…

I’ve been thinking about this for a few months now.  It started in earnest with an email question that I wrote about in Can You Negotiate SCI-Level Casket Discounts?

Then we had a response from Michael Manley on a Possible FBA Buying Collective.  In the post, he describes a buying collective for funeral professionals that he plans to get off the ground in the coming years.

But all of it comes back to a basic issue:  maximizing income and minimizing cost.

As a business owner, I wrestle with keeping my costs down.  I’ve sought out lower costs by buying materials in bulk, buying from traditional retail outlets during sales and using coupons and promotional codes on websites.

I’ve figured out how much it costs me to have my assistant handle bill collecting versus the fee I’d pay for accepting credit cards, which has lead me to put off having a full merchant account with a credit card processor.

We save every peice of fabric that is cut off of our wholecloth when creating one of our quilted mortuary cot covers and look for new uses.  Some scraps (big squares) have been stitched together to form the quilts I’ll give as gifts this Christmas.  (If you’re a member of my family, forget that you just read that or risk not being surprised!)

Many of the fabrics we use are wider than we need, so we cut off a strip.  Those strips (about 12″ wide) are the perfect size for our latest product (still under wraps!) that we created after looking at our materials and thinking “What can we make out of that?”

Of course, there are opportunities to save money that we don’t take.  We could get a cheaper version of the nylon lining fabric that we use in our covers (we call it the FluidBlocker) but we’d have to sacrifice some of the protective qualities, so I said “no.”

How does this affect the typical funeral professional?

You need to keep your eyes open.  There are always methods to save money, but they’re not all beneficial and some will actually negatively impact your standing in the community.

Want to be seen as a prestigious firm with community roots?  You can’t have a crappy hearse that’s ten years old.  On the other hand, a price-focused funeral home can’t be located in a large, expensive building in the swankest part of town.

How you spend money at your firm should reflect the image you want to project.  Caskets aren’t your image; they reflect the image your client family wants to protect.

And to be brutally honest, the family has no idea who makes the caskets you carry or how much you pay for them.  Casket manufacturers have done little to brand their identities with the public, so why should you worry about the name?

I see three strategies for firms trying to decide which caskets to carry:

1.  Meet with every possible casket rep. in your area.  Tell each of them that you’re picking a brand and will be taking into account the discount offered, showroom assistance provided and speed of delivery.  Pick the one who gives you the best deal and offers the most benefits.

2.  Order caskets from a lot of different makers and have them on your floor.  Or get corners or pictures from a bunch of different suppliers.  Let your families decide which caskets they want to buy.  You might find that families choose based upon color and features (“Oohh… it has butterflies embroidered in the lid!”) and not the manufacturer.  If so, find the best caskets you can at the lowest price and don’t worry about who makes it.

3.  Stick with what you’ve been doing.  What’s the most you’ll save per casket?  $50?  $100?  Don’t worry about the small percentage you might save and use your time to do some more P.R. in your community.

Having run a small firm, I can tell you that we employed each of these strategies at different times.  In fact, our “proprietary showroom”, with fancy cut corners and pictures, often played host to several inexpensive caskets from the local casket company.

If a cash-strapped family wanted the simplest casket possible, we’d ask them what color they wanted and order a 20-guage, non-gasketed unit from the nearest independent casket company.  Their prices were half of York or Batesville and their quality was less, but not one of those families complained.

In fact, each family was impressed that they could get such a “pretty casket” for so little money.

Sure, we funeral professionals love a pretty casket (I saw some beauties in Vegas), but most consumers don’t even know how to close a lid properly, let alone discuss the merits of swingbar handles, urn corners or stainless steel.

So do what’s best for your company.