Volume discounts can deliver companies significant savings on manufacturing. But ordering in bulk is an art that requires some know-how in order to avoid common pitfalls and realize the potential savings benefits. Here are a few tips for deploying an effective bulk purchasing strategy and avoiding some common mistakes.
Compare Suppliers
Cost-efficient bulk buying starts with comparison shopping. The easiest way to research suppliers is to ask for referrals from peers in your industry or other businesses. You can also research suppliers by looking online. Some suppliers offer bulk discounts on Amazon, along with free shipping for Amazon Prime members. Amazon’s Chinese competitor Alibaba is another place to find bulk discounts. You can also use free directories of suppliers such as ThomasNet. Your local library may be able to help you access premium supplier directories such as Scott’s Directories. Another way to search online for suppliers is by searching for products by your industry’s North American Industry Classification System (NAICS) code, which you can find on the website of the U.S. Census Bureau.
Once you’ve identified some suitable suppliers, you should request quotes and test samples before making a purchase. A common mistake is ordering a bulk quantity before testing a sample. You should also inquire about minimum order quantities, payment terms and turnaround time.
Consider Alternative Materials
You can sometimes save money on bulk orders by considering different options for materials. A frequent mistake is choosing a material that is more expensive than necessary to produce a quality product. For instance, a quality material only needs to be strong enough to perform its intended function, so it’s not always necessary to use the strongest material available.
You can sometimes identify alternative materials by getting suggestions from your supplier. Suppliers often have experience dealing with a wide range of materials, and they may have insight into options you weren’t aware of. For instance, o-ring supplier Apple Rubber offers a huge selection of customized products made out of specialized materials such as Viton, a fluorocarbon with high temperature and chemical resistance used especially for seals in aircraft and automotive engines. Your supplier may be aware of alternative materials such as this that can save you money on prototyping or production.
Research Quality as Well as Price
When comparing suppliers and materials, it’s important to consider quality as well as price. Going for the lowest price without considering quality is a mistake that can hurt your business and your reputation. Just because a material is inexpensive doesn’t mean it needs to be of cheap quality. When you’re not sure about a material’s quality, it may be worthwhile to spend more to guarantee a better product to your customers.
You should also research suppliers’ service quality. When you initially contact prospective suppliers, pay attention to how quickly they return phone calls and emails, which can be an indicator of their customer service. Ask what kind of turnaround time and guarantees they offer. Read online reviews and testimonials and ask around to research their customer service reputation. Find out how reliable a supplier is before making a commitment to a bulk purchase.
Use Precise Measurements and Specs
When ordering products in bulk, it’s vital to be precise in communicating your requirements. A mistake in a bulk order can be very expensive and can set your production schedule back. Avoid this problem by making accurate measurements before requesting a quote or submitting an order. Use the most precise unit of measurement available. For instance, it’s better to use 1/1,000 of an inch instead of 1/100 of an inch.
Similarly, you should submit precise design specs to make sure your supplier knows exactly what you need. If the item you’re ordering has a catalog number, make sure you’ve selected the correct number. For custom designs, submit a professional drawing or digital design to make sure your supplier has a clear understanding of what you’re ordering. Hire a professional draftsman, engineer, rapid prototyping service or 3-D CAD modeling service to help you create precise drawings for your supplier.
