Fact or Fiction?
Always buying supplies from the vendor with the lowest price for that particular item saves the company money.
This is a common misconception and I'm going to explain why.
Your time is worth something - remember that. Believe it or not, it's not all about money. What it's all about is - money. Confused? Don't be. Just remember this one simple fact: the vendor cost of the item(s) isn't the only cost associated with the purchase. This is where most people get derailed. They concentrate on getting the lowest price for each item that they're purchasing and they end up creating multiple orders to multiple vendors.
How much time do you spend gathering current pricing, comparing that pricing and placing the order? Vendors adjust their prices periodically - especially at the first of the year - so the price you paid last time may not be the price you pay now. Somehow you have to get the correct price. You may choose to fax an RFQ, go to the vendor's web site, pull a recent invoice, or maybe pick up the phone and call a real person. However you choose to do it, you're spending time on it and, as we all know, time is money. Add up the amount of time it takes you to get all of the pricing, decide which vendor gets which products and place all the orders. If you work for a medium or large company, placing the order undoubtedly requires creating a purchase order for each vendor. Multiply that time by your pay rate.
Your co-workers' time is worth something. You're not the only person that has to touch these orders. After you've placed the orders, someone has to receive the orders in. Maybe you have a receiving department to handle that task, or maybe you work for a small company and the receptionist takes the deliveries that arrive. Whatever the situation, someone has to touch those orders and check them in when they arrive. For each person that touches it, multiply time spent by pay rate and then multiply by the total number of orders you placed.
After the orders are checked in and verified, purchase orders need to be closed out, product needs to be distributed to employees, and bills need to be paid by accounting (possibly 3 or 4 different invoices to different vendors). Multiply time spent by pay rate. Dollars are adding up now.....
The orders don't all arrive at the same time. Every vendor has a different turnaround time. Is it worth it to you to wait an additional 3 days just to save $1 on a box of file folders? Instead of having one order arrive all at once, receiving it, processing it, and distributing it one time, now your personnel have to repeat the process 3 or 4 times as each order shows up. You just lost everything you "saved." And, on a side note, how much productivity is lost by the person who is waiting for those folders or those staples?
Delivery isn't always free. Some vendors charge delivery fees, some don't. Some charge delivery if your order is small and give free delivery for larger orders. You could end up paying, say, $9.95 for delivery to save $3.47 on paper clips and sticky notes. Add delivery fees to all of the calculations above. Hmmmm....Doesn't sound like such a good deal now.
Quality is important. Cheaper is not always better. For instance, if you buy the cheapest laminator instead of the one that really fits your needs, one of two things will happen - either you won't be happy with the quality or you may burn it out because it's not heavy duty enough for your purposes. Either way, you end up buying a different one and now your cost is significantly more than what you budgeted.
Service is important. What happens if you have a problem with your order? How long will it take you to call the vendor and resolve the issue? Do all the vendors you use have friendly, helpful customer service staff? What do they say if you call and ask for an item that you can't find on their site or in their printed catalog? Are they willing to try to find it for you or do they just say "Sorry, we don't carry that."? Do all of those suppliers have a loyalty/rewards program? What is their return policy? Do your deliveries arrive on schedule? Is the driver courteous and helpful? Will he take your copy paper to your copy room or does he just leave those heavy cartons inside the door for you to deal with? Personal service is part of the value of a supplier.
Fact or Fiction?
I can find one vendor that has the lowest price on everything I need.
No one vendor is EVER going to be the lowest price on every single item. Period.
To maximize your budget and your purchasing power, make a list of your most frequently purchased items. These are your heavy usage items - the ones that the majority of your budget is spent on. Concentrate on the pricing for your more expensive items like toner and copy paper (or your boss' favorite pens that normally cost $6 each). Getting paper clips for a penny per box isn't going to make a significant dent in your overall cost savings - and you know that if a vendor is selling them to you for a penny, they're making that money up on the other supplies you buy. Just stop to think about it - the vendor has to make a profit, right? Profit comes from selling something at a higher price than what you paid for it. If they're charging you a penny per box, their cost is - - -zero? You know their paper clip supplier isn't giving them inventory for free. Let's be rational here.
Bid out those heavy usage items and ask each vendor to specify how they price the off-contract items. Ask about their ancillary services. Compare the proposals and settle on one vendor. Get to know the sales rep that is assigned to you by the vendor. Schedule monthly meetings to see them. Create a relationship. Then, when you need something that's a bit expensive, call the rep and ask for a special price - they'll almost always give you a deal if you're a good regular customer.
Long-Term Relationships - Our goal is to form a long lasting relationship with you, our customer. As your supplier, we'll take the time to get to know you and your business. It is important to us that you are getting all the help and guidance we can possibly provide. We aren't like those other suppliers who see their customers as just a number on a sheet of paper. We take care to grow our relationship with you and we know a good relationship isn't just formed overnight. It takes time - and time spent on you is time well spent.
Creative Solutions - Not all problems have a simple fix. Many require plenty of focus and time to solve. At OEX, we put in that extra effort and go the extra mile for you. We are experts at thinking outside the box to come up with a solution that is tailored to your specific circumstances and needs.
Single Source Provider - Going through different companies for all of your office needs can be exhausting and time consuming. We realize the extreme difficulty of doing this, so we decided to make it simple. We provide comprehensive solutions for all of your business needs - everything from office furniture consultation, design and selection, next day delivery of over 40,000 office supply SKUs, to commercial printing and promotional items supplemented by professional graphic design services. We do it all. Take back all that time you're wasting and join us to start improving your business today!
Value Proposition - Every business wants to save money. Getting the lowest price on everything that you buy might seem like a good idea, but a better way to save money is to create a strategy that equips your employees with the proper tools to do their jobs efficiently. OEX will help you create a strategy to buy the right products, in the right quantities, for the right prices. We also have the depth and purchasing power of the big box stores, but none of the overhead, so that savings gets passed on to you! We can help.
Compare the proposals and settle on one vendor. We're confident that one vendor will be Office Express.
Call us - we're waiting to help you!