Running The Numbers
If a single vaccine were, hypothetically, $5 and twenty of them were $80, then by buying a set of twenty as opposed to a singular vaccine, you save $20. Basically, there’s a twenty percent savings. Now, that’s not going to be what you save across the board, but generally, the more you buy in bulk, the more you save.
Consider a 10% savings on a product through bulk savings. If you go through a thousand units through a normal period of operations, then that means you can save substantially. If each unit is worth $1, then you would save $100 per cycle. If there are four such business cycles in a year, that’s $400 a year.
If a unit costs more than $10 per, the potential for savings is even greater. Say you’ve got a burn-through rate of 1,000 units per quarter at $10 per individual unit, with a 10% savings for bulk purchase. Well, then by purchasing these units in bulk, you would save $4,000 a year, or $20,000 in five years. The savings pile up substantially over time.
The key to saving the most over time is consolidating your yearly expenses proactively. You need to know how much you’re spending every year on non-bulk purchases, then source the same products from bulk suppliers who allow you to purchase large quantities of necessary items.
The Next Step
Once you’ve determined your yearly expenses, the next step is to find an organization that is willing to sell to you in bulk. There are quite a few out there, so you’re going to want to see what kind of options you’ve got before committing.
MPPG.net is one of many group purchasing organizations that can help your medical practice source: “Discounted pricing on vaccines, medical supplies, credit card services, medical liability, office supplies, and more.” Grouping as many things like this together as possible can be a very instrumental step in preserving your bottom line.
You’re going to have a lot of costs which can’t be avoided, but there are some infrastructural expenses which would seem to be unavoidable but can be diminished. For example, if you build rather than renting, you’re able to turn the cost of rent into ownership. If you’re paying $5k a month to rent an office of around 2,000 feet, that’s $60k a year.
Turn that into a building you’ve built and own, you spend the same but have an asset. You don’t even have to build, honestly. Five years of $60k annually is $300k. You can get quite a bit of property for that price. Taking out a loan, purchasing property of this kind, and paying the loan back over a five-year term will hit you just like rent, but you retain the loss.
The infographic below, courtesy of LoveBulkFoods.com, provides insightful information why one should consider buying foods in bulk rather than packaged.
One Final Thought
Additionally, you can use sustainable energy. If you use less than 9.3 kWh daily, for a $15k expense incorporating wind, solar, and water energy, you may never have to pay an energy bill again. That can save you $12k a year, if you’re paying $1k a month for energy. It all depends on your situation.
What you’ll want to do is look at your business and see where you can cut the fat. By purchasing in bulk, owning instead of renting, and going with sustainable energy solutions, you can save tens of thousands yearly. Over the course of five years, you may save as much as $100k or more, and have assets to show for it.
This just scratches the surface, but there are many ways to save in business. So look at your operation, and see what you can save. You may be surprised, if you crunch the numbers.