Why one supplier can save you more than you think.
Nobody plans to end up with five suppliers. It just happens over time. One for cartons and tape. Another for gloves and hi-vis. Someone else for the bin liners, and a separate account for the coffee and the copy paper. Every one of those made sense on the day.
The problem is what it all adds up to. None of it shows on an invoice, but it is costing you.
Here are five places it hides.
1. You pay for freight over and over
Five suppliers means five deliveries. Five lots of freight, five trucks at your door, five chances to fall just under a minimum order and cop a charge for it.
It is the same reason freight companies bundle loads. A half empty truck still costs the same to run as a full one. Studies of freight consolidation put the saving at around 18 to 30 percent when smaller loads are combined into fewer, fuller ones.
Your incoming deliveries work exactly the same way. Stretch wrap, gloves and hand towels on one delivery cost far less to move than the same gear turning up on three.
2. Every order costs money before you even open the box
This one surprises people. Raising a purchase order, getting it approved, receipting the delivery and paying the invoice takes time from several people. When researchers add all that up, processing one order and its invoice costs real money before anyone has touched the product.
And the paperwork costs the same whether the order is worth $200 or $2,000.
Four suppliers ordered from monthly is 48 orders and 48 invoices a year. One supplier is 12 and 12. Same product, a quarter of the handling.
3. Your time, and your team's
Ask anyone who does the ordering how long it actually takes. Different logins. Different cut off times. Different delivery days. Different people to ring when something has not turned up.
Research on small business owners suggests around a third of the working week goes on admin rather than the actual job. Ordering, price checking and chasing deliveries all live in that pile.
One account is one order, one login, one person to call and one delivery to check in. It is not exciting, but you get the time back every single week.
4. Splitting your spend, costs you buying power
Spend spread across five suppliers is five small accounts. Put it in one place and it becomes one decent account, and volume is what gets you better pricing.
There is good research showing the flip side too. When businesses buy bits and pieces outside their main supplier, they typically lose somewhere between 5 and 16 percent of the savings they had already negotiated. Buying at list price rather than agreed rates can cost 15 to 40 percent more on consumables.
Packaging, cleaning, PPE, office and cafeteria are exactly the categories this happens in. Lots of small orders, none of them big enough to get looked at properly.
5. Things run out, and nothing matches
This is the one that bites on a bad day.
When your supplies come from five places, nobody has the full picture of what you actually use. There is no single ordering history, so nobody spots the gap coming. You find out you are out of stretch wrap when the truck is already waiting.
You also end up with product that changes on you. Three different glove suppliers over three years means different sizing, different grip, and different paperwork when someone asks you to prove what you supplied.
One supplier means one usage history, one spec, and one person to sort it out when it goes wrong.
What to do about it
You do not need a big project. Try this:
- Pull the last three months of supplier invoices and count how many accounts you are running.
- Add up the freight charges across all of them.
- Count how many orders and invoices your team had to handle.
- Work out which categories overlap and could go on one order.
- Move those across, and set up a standing order for the stuff you buy every month anyway.
Primepac supplies packaging, cleaning, PPE, office and cafeteria on one account, one delivery and one invoice. Same products, a lot less mucking around. If your usage is steady, we can set up a standing order so the regular items just turn up.
The savings on the products are worth having. The savings on everything around them are usually bigger.
Talk to our team about putting your workplace supplies on one account.
