Though perhaps not the most exciting element of business, material costs have a huge impact on how successful your company is. If you can secure lower prices on key materials, you can increase your business’ profitability while keeping overhead low. Here are four ways to go about getting the best deal on the materials your company uses to create its products.
Buy in Bulk
Probably the easiest way to get better prices on materials is to buy them in greater quantity. If your business buys in bulk, suppliers will often give you lower prices as an incentive. Employing this strategy is dependent on having enough space to store the extra material until you need it, but if your business has a large warehouse, it is a great way to save money over the long term.
Find Suppliers That Sell Many Materials
A similar concept to buying in bulk is using a supplier that sells multiple materials your business uses in order to get bulk discounts on large orders. If your business involves manufacturing plastic goods, for instance, you might want to find a plastics supplier such as Plastics For Industry Pty Ltd that sells ABS, PVC, nylon, and acrylic all in one place. This not only has the potential to save you money but also keeps the ordering process simpler than it would be with more individual suppliers.
Don’t Be Afraid to Negotiate
Just because a supplier lists a certain price per unit doesn’t mean that that price is set in stone. If you’re in a position to provide a supplier with steady business over a long period of time, there’s nothing wrong with asking for a lower price directly. Be reasonable in what you’re requesting, as even a small saving in per-unit cost can add up considerably over time.
Look into Costs Beyond Price-Per-Unit
Though the amount of money you pay for materials themselves is important, there are other costs that are often built into the procurement process. These include delivery, storage, insurance and other incidental expenses. If you can bring these costs down, you can reduce the dollar amount you actually pay to get materials without paying less for the materials themselves. Look at your supply chain as a whole, and chances are you’ll be able to find some fat to trim.
Though these may all seem like ways to save very small amounts of money, you’d be surprised how quickly small savings on material costs can compound. Try to get better deals on your materials and you’ll be able to see just what a large difference it can make in your bottom line.