By Blair Ball
Businesses learns to buy what they need when they need it. That “just in time” mentality came out of the manufacturing industry and has spread through many other industries to become a business mantra. While it does make sense in some cases, it ignores the fact you can save money buying in volume, and saving money has always been a powerful business mantra. Here’s what to know for your business:
Get the Best Deal
Every consumer knows a two-for-one special is a good deal, and they look for that. Businesses know if you can buy 10 cases of something, you’ll probably get a price break. But what about 100 cases? Or 1,000? When does that make sense?
Medical clinics go through a lot of latex gloves. They don’t have a shelf life. Whether you have 100 boxes or 1,000 is only a matter of storage space. Restaurants go through dishes and silverware regularly. You can buy a few replacement pieces, or purchase enough to last you a few years.
What Is the Benefit of Buying in Bulk?
The first is money. Yes, there is the up-front expense of volume buying. The savings is in what you would spend over a few years for the same item as prices increase. Businesses expect a yearly increase in the supplies they rely on. A five to six percent increase every year, or every other year, makes a dent in the company’s finances. Think of a volume purchase as locking you into a price every year until your supply runs out.
The second benefit is that you have the supplies when you need them. A restaurant that experiences the loss of half of its dishware due to an earthquake has to scramble to find replacements unless it has a backup stock of plates.
The third benefit is guaranteed availability. Using the restaurant example again, if the eatery tries to purchase a few more plates, and the design has been discontinued, someone will have to spend time finding that plate elsewhere. Buying a supply of them ahead of time gives you confidence you’ll have just what you need when you need it most.
What About Shipping and Storage?
Shipping a large volume of items is easy with less-than-truckload (LTL) carriers. You will get bids from several carriers and independent operators who can pick up and deliver your goods. LTL shipping is used when you don’t have enough to fill a truck.
You can save money, stay organized and keep track of your shipping and mailing by using a postage meter. According to Pitney Bowes Small Business, a postage meter has a built-in scale that is up to date with USPS standards and rates. It increases speed and cuts down on waste of unnecessary printed postage. If you send a lot of letters or small packages, a postage meter can be a great asset to your company’s efficiency.
Storage is wherever you have space. If you don’t have space, renting unused warehouse space can still make the volume purchase a good deal. If space is still an issue, you could look at working with an exchange or alliance. An alliance brings groups of companies together to pool their orders so better discounts can be received. You and nine other healthcare clinics can each order 100 boxes of latex gloves, so a total of 1,000 can be ordered. You’ll just have to come up with space for 100 boxes.
Volume buying continues to be a good deal for business. It creates long-term security, confidence and cost savings. Does your business buy supplies in bulk? Share your thoughts in the comments.