Home topics news Gemma Thompson, Principal Consultant at Proxima Australia News News Profit under pressure – Five ways to save money, without burning your suppliers Gemma Thompson April 1, 2026 Slashing supplier costs without strategy creates fragility. Proxima’s Gemma Thompson explains what works instead. Australia’s high-rate, high-inflation cycle is now embedded in balance sheets. Arguing otherwise is a distraction. But what looks like a cost problem is also a risk problem. In these times, the instinct is to slash spending as fast and far as possible. But this is an uncomfortable reality; your suppliers are hurting too. Yes, your business needs a better price. But you need your suppliers to survive, and critical relationships protected. Bad cost-cutting creates fragility. And fragility may turn out more expensive than inflation. Negotiating hard means negotiating smart. Picking your battles. Making intentional trade-offs. Landing on costs that are acceptable now, and a supply base that works for you in 12 months’ time. Think about the following five principles. Transparency trumps threats… in most cases “ In light of the current economic circumstances, we are requesting all suppliers to fund a 10% discount until XXX ” is a note that is probably being readied in a number of meeting rooms around the world. That might work for some suppliers, but not all. Step one – know who you are negotiating with. What value does a specific supplier bring, and therefore what are the consequences that you are playing with? What’s their impact on cost, growth,