Any business owner nowadays faces huge competition. The internet means that everyone has access to powerful information. Any average Joe can find all the information that they need to have a fully functional business within a matter of minutes. The barriers to entry are extremely low, which means that the competition throughout the world is incredibly high. Of course, the businesses that manage to succeed are those that are able to obtain the highest revenue, but also keep their overheads to an absolute minimum.
Purchasing
Purchasing products is the point where a lot of money can be wasted or saved. Not picking the right supplier is going to mean that you overspend. If you are selling particular items on a regular basis, but getting them from a local supplier, it is time to have a rethink. There are thousands of offshore suppliers that are likely to be offering these products at a fraction of the price. You could buy in bulk, maybe even a 12 month supply, and find that you save 50% or more on the purchase price. This means that you have to sell less, in order to make more.
Of course, if you are selling your own branded items, it is worth consistently monitoring your current manufacturer and comparing them with other manufacturers that are out there. There is always a cheaper option, but don’t compromise on quality just to get a lower price. If you do, then the reputation that your business currently has is going to suffer a great deal.
Storage
Storage facilities can be extremely expensive. You need a storage facility that you use on a day to day basis, but then you need overflow storage facilities. This will mean that you can increase and decrease the capacity of your business in relation to your stock, without actually having to go into any long term contracts. In most cities throughout the country there are storage facilities where you can place your overflow stock. This helps to decrease costs but it also means when stock is low, you are paying a lot less for your storage than you would usually.
Distribution
The majority of the main stream couriers will offer some kind of bulk discount to their commercial customers. Enquire and see what deals they are currently offering. Obviously it is worth comparing a few different companies. It might be that your current service provider is fairly well priced at the moment, but their commercial package might not be as competitive. By going onto a contractual service, you are likely to save around 15% on your distribution costs, which means you can make a lot more profit without even increasing your revenue.
Conclusion
In every segment of the supply chain, there are plenty of chances to save lots and lots of cash. Purchasing, storage and distribution are all extremely important and if you choose the right company, such as Anchor Point Industrial, for every step of the process, you could find yourself saving 15% or more on the overall cost of getting the product from the manufacturer all the way to the customer.
Originally posted on May 17, 2013 @ 10:05 am