Chapter 1: What is the main topic discussed in this episode?
You're listening to TED Talks Daily, where we bring you new ideas and conversations to spark your curiosity every day. I'm your host, Elise Hu. Almost every time I open a social media app, I see content about budgeting or how to control everyday spending.
But in this talk, procurement expert Wolfgang Schnellbacher flips the script on money habits and shares why, for him, everyday spending is actually one of the most powerful and overlooked skills we have in our toolbox.
Drawing on lessons learned from elite corporate buyers and personal scenarios, he tells us three deceptively simple rules that can turn our routine purchases into smarter, more intentional decisions.
I've got two questions for each one of you. Question number one, how much money did you spend in your entire life so far? That already takes a bit to estimate, right? And question number two, did you spend your money wisely? If you hesitate now and are not so sure, it likely means you're not a good buyer. Frankly, because you have not even defined for yourself what good buying truly is.
And that, sorry for the bitter truth, despite your buying things pretty much every day. And good buying can have such a massive effect on your entire life.
And through your lifetime, you will spend a fortune, if not several fortunes, considering we're in Dubai, spending it more wisely will either make you have to spend less, or for the same amount, make your life more luxurious, comfortable, sustainable, fun, or whatever else you want it to be. And the good news is, there are people you can learn it from.
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Chapter 2: What are the common misconceptions about everyday spending?
As a procurement leader in BCG, I work with them throughout the world. High-tech companies, auto manufacturers, American big pharma, Middle Eastern oil companies. From Swiss clock manufacturers to Middle Eastern mass producers, they all have to buy a lot of things. steel, spare parts, intellectual property rights, fruit. Just last week, I did a live auction for a Norwegian salmon farm for fish.
My promise to you is, if you learn from their combined knowledge of these professional procurement teams, you will be a good buyer for the rest of your life. And on top, it's easy. It only boils down to three rules these companies do right. Number one, prioritize on what really matters. Now, that sounds simple, doesn't it? The truth is, it's not. Because there's a few words missing.
Prioritize on what really matters for a group together. In every company, in almost every household, there's a few players. And even for yourself, you're oftentimes not so sure. How to prioritize healthy food versus cheaper prices? How about a more comfortable buying experience versus sustainable products? Do we pay extra just to make our neighbor jealous?
You might laugh, but I'm from Germany, and you might argue we built an entire auto industry purely on that feeling.
Chapter 3: What are the three rules for smarter purchasing decisions?
Now, professional buyers, they actually read the corporate strategy. They align with business partners to find out what is it really that makes our company better. The superstar buyers go even further. They graphically pin down what are the priorities and then share with everybody. For your life, maybe at the start, it might look like this.
During education, start of your career, you don't have so much money. And therefore, you want to have fun, but you have some cost consciousness. A bit later, you might find a family, get children, and you care a lot about quality of the food, of the toys, of the furniture, just to have it all right for them. Maybe a bit later, you care a lot about comfort.
You just want to have an easygoing lifestyle. Now, the core thing is, to be a good buyer, you don't have to follow a predefined set of rules. It's just for yourself and your loved ones, you need to have these priorities very clear. And now we are already at rule number two, influence your allies. Imagine the following situation.
You're off to buy a new car, you arrive at the dealership, and the first thing that happens is your kids climb into the car, they have dirty boots on, and they yell and tell you how much they love it. The colors, the design, everything. You're already a bit on your back foot, starting to negotiate, And the car dealer basically tells you that right now, cars with dirty seats are a bit rare.
He can't do anything on the price. In that moment, your wife gives you a look like, please don't mess it up. I also want this car so much. You will very likely not not buy the car. You will for sure not buy it at a good price. In business, the good buyers say no. They have to align with their allies up front. Who's going to say what in a negotiation, after negotiation, before a negotiation?
Only if these things are clear, they can ensure they really strike the best deals. The superstar buyers go even further. They have the ability to influence the stakeholders on what they really want. Let me tell you about the inverting method. I once had a workshop with a big railway company.
We were supposed to reduce the cost of big steel tracks, and we had a group sitting there of rather old buyers, basically telling us everything is optimal. After 60 minutes, I was still in front of an empty flip chart, panicking a bit. My colleague, however, was very cool. He just turned around to the crowd and said, let's forget this exercise for a moment.
What would you do in the following situation? You just get a new boss, he's younger than you, and he's firing you. It's unfair, and the only thing you can do to strike back is in the next three months, when you're still in the company, increase the cost. Do you have any creative ideas to increase the cost without just raising prices? And now the ideas were flying.
We could buy two long tracks we have to cut. We could buy two short tracks we have to weld together. We could buy too many and we have to put on stock. We could order too late, so we have to pay a fee. We could pay too early to not have interest rates. We could pay too late to pay a fine. All of a sudden, the flip chart was full, and my colleague turned around again.
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