How to Choose an Office Supply Vendor - Pricing

Hello again! 

I know what you're thinking.  You're talking back to your monitor right now wondering what took me so long to get to this point.  Well, if you've been following this series, hopefully you've started to realize that there are many things to consider when choosing an office products vendor - not just one.  People put too much emphasis on that one thing.  But it is there, and we do need to talk about it, so here we go.  Let's discuss the dreaded

 

P   R   I   C   I   N   G

 

Courtesy of ksalbrecht88 on youtube.com

 

Mistake #1 - Much of the time, the person responsible for purchasing the office supplies for a company concentrates on the cost of each item and ignores the other topics we've already discussed in this series.  Now, to be fair, you may have been given a budget to work with and you're doing your best to stay within that budget, but as the employee assigned to this task, it would be a feather in your cap to relate the other issues to your boss and explain why the price isn't the only thing to consider.  Value added services are just that - Value Added!

Most office products vendors sell the exact same items, so availability isn't usually an issue unless you're dealing with house brands.  Those may vary from one dealer to the next and some dealers will have exclusive items that you can only get from them, but those items usually aren't deal-breakers.  If dealer A has an exclusive brand of pen, you can usually find an equivalent substitute at dealer B. 

The ABC's of pricing:

  • Inquire as to whether the supplier has any sort of pre-made frequently ordered products contracts and ask for a copy of the pricing for those programs.  (Office Express has one called Essentials.)
  • Make a list of your most frequently ordered items and your current price and compare them to the supplier's program.
  • Give the supplier a list of any of your frequent items that aren't on their program. Ask them to create a price plan for those items for you at their best price. (We'd be delighted to!)
  • Ask if they offer competitive price matching.  Obviously, it's not reasonable to expect them to put every item you buy on a price plan for you and believe it or not, no single vendor is going to be the lowest price on every single item.  If they offer price matching (yes, we do!) and the difference is significant, contact your account manager or customer service representative and request a price match. Tell them what company they're matching to and make sure it's the same item, size and quantity.  If you're not comparing apples to apples, the supplier may be hesitant to believe the information you provide in the future.

Be smart - and don't be fooled by marketing ploys!  Getting a box of paperclips for a penny looks great on paper, but you know there's a catch.  A company stays in business by making a profit. Profit = the amount received over and above the cost of the item.  To sell you that box of paperclips for a penny and make a profit, the supplier has to pay the manufacturer zero.  Now you know that's not going to happen.  The supplier is running a loss leader and they're making their profit on you someplace else.  The better deal is going to be the supplier that has consistently low prices, even though every price may not be the same as what you're paying now.  (If you do the math, you'll see that I'm right about that.)

Lastly, find out if there are any added fees.  Is there a minimum order? (Not at Office Express!)  If you need to order below the minimum, will the dealer accept the order and will they charge you a small order fee?  (No small order fees here.)  Is there a delivery fee? (Not with us!)   What about a handling fee? (Nope.)  All of these add to the overall cost of the order (another good thing to point out to a number-crunching boss).

That about covers Mistake #1.  Ok, what's Mistake #2, you ask?  There really isn't one - #1 pretty much covers it.  

Realize that the price you see isn't always the price you're paying - and know why. Then explain it to your boss.

Thanks for stopping by today!  Check back on May 8 for our last installment in this series, which will cover Payment Terms and Refunds.