You usually shop at specialized retail stores for whatever your business needs. It’s shocking to me that this is such a common practice, especially in small and medium-sized businesses.
I’ve always wondered why anyone would do such a thing. I can understand the urgency if you have an important client visiting and need to pop out to buy a bottle of wine or some urgent material to finish a job.
But frequently buying business supplies from specialist retail stores, such as office, building, or general supply stores, isn’t cost-effective. It signals a lack of planning and organization within your business, or that you just don’t care.
Smart Procurement Strategies for Small and Medium Businesses
If you think you’re too small to matter, rest assured that any good supplier will value your business, no matter how small you might be. If you think you’re controlling costs by shopping retail, think again. Retail stores are designed to make you spend more, and the only thing controlling your purchases is the size of your shopping cart.
You should put a plan in place, organize, and invest time and effort into developing a base of suppliers you can work with to help you grow. You can use the services of procurement professionals like us to leverage group purchasing power, gain access to a larger supplier base, and secure better commercial terms.
Stop wasting your time and money on pointless visits to retail stores when there’s a better way. Please contact us to help you develop a supplier base that works for you.
Market Analysis and Sourcing & Procurement Intelligence – Reporting and Analytics
You would consider alternatives like buying new, used, or renting goods or for services to outsource or keep it inside the company, but are unsure how to evaluate the cost-effectiveness and benefits.
You don’t have to buy new goods every time or hire a dedicated in-house full-time employee for a particular job. Research the market to see if it makes sense to buy used or rent something, especially in cases where you’re purchasing something of higher value that will tie up a lot of your cash and capital, such as a piece of equipment.
Consider the Total Cost of Ownership (TCO) including maintenance, depreciation, and amortization costs. Equipment is run and maintained by people, so you have operating and training costs to consider. You should also factor in the cost of consumables to run that equipment and all the capital and cash you will have tied up in carrying inventory to keep the machine running, for example, spare parts. There are also hidden costs such as the cost of transport to replenish that inventory, customs clearance if you need to import it, and so on. There are many things to consider before making the right decision. Weighing all the options requires a lot of analytics and a significant amount of time and effort.
Importantly, what is often forgotten is the Opportunity cost. This is the cost of missed opportunities you could gain from if you spend all that money on one thing. Costs such as these could be invested in advertising to sell more, in another piece of equipment to produce more, or even invested to earn interest.
The same logic can be applied to services. Let’s use our procurement services as an example. You should consider the best option for you: having an employee on salary, investing in their training, and putting a lot of time and effort into developing relevant skills and experience to benefit your business and bring value. Alternatively, you can opt to assign procurement to other departments such as accounting or sales to be done alongside their normal jobs. Or the final option, which we believe is the best, is to outsource it to professionals like Alt-Source and have peace of mind that procurement is sorted.
The best thing is that you can outsource it on an as-needed basis.
Thinking on what to do? Scheadule a free meething with us and let’s analyze data, explore all the options, and select the best one for you
How to Stay Competitive in Reselling: Exploring Better Commercial Terms
If you are the one continuously buying from regular suppliers, mark up the prices, and resell, without exploring a market for better commercial terms. If you are in the business of reselling goods and have regular customers, it’s essential to stay proactive to avoid losing them. If you don’t do your homework, your customers might, and you’ll certainly lose them. Research the market to find ways to improve your competitiveness, which can benefit your customers and secure your long-term success.
Don’t settle for the status quo; continuously explore new suppliers, options, and alternatives. If you decide to maintain your resale prices, the better commercial terms you find through market research will positively impact on your profits.
Alternatively, you can pass some of those savings on to your customers, positioning yourself as a reliable and valued partner-supplier.
Alt-Source at Your Service! To help You with Procurement Optimization
We specialize in market analysis, sourcing, and supplier relationship management to help businesses like yours optimize procurement strategies.
Whether you’re evaluating new vs. used equipment, considering outsourcing services, or exploring better suppliers for reselling, we can guide you through the best options and ensure your business is making cost-effective decisions.
So don’t wait anymore contact us now to improve your procurement process and grow your business effectively.