How To Reduce The Cost Of Buying Your Office Supply

While office products are a necessity, often they can end up costing a lot and create a huge impact on the cash flow of a business. The office supplies industry is far more complex than it appears to be. It is not uncommon for an organization to purchase thousands of different products over the course of a year. Such purchasing requirements can present a challenge to control costs. A competitive, established vendor maximizes their value to your organization by providing prompt attention and service, efficient supply management including just-in-time supply delivery, discounts for volume and access to a full range of diverse catalogue items that are available both on-line and through a catalog.

Cost reduction – a universal necessity

Everyone needs office supplies, from the small business to the largest multinationals. The daily grind of business requires tons of paper to be consumed every day, along with miles of pencil lead, staples, ink, and everything else that is used by millions of offices all over the world. Costs from purchasing office supplies could account up to 40% of operational expenses, on the average. More often than not, companies spend 20% more than what they really need to.

Overspending impacts profitability

When a company is wasting money, profits grow smaller. A company that could be earning $100,000 in monthly revenues could lose up to $25,000 or more of potential profits, all because of unnecessary spending on office supplies. Every businessman knows that it is easier to reduce expenses than to increase profits. A profit margin of 10% can be doubled by cutting costs by that same amount. Fortunately, a lot of companies are becoming aware of this fact, and a lot more are also starting to take measures to curb overspending on office supplies.

Order in bulk for huge savings

One of the ways of minimizing the expenses on office supplies is by making bulk orders. When you order these products in bulk quantities you can avail volume discounts from your vendor. The cost of office products and office supplies like any other commodity keeps increasing and once the cost increases it is very unlikely that the cost will come down. So by ordering for the entire year you freeze the cost of the products for one full year; besides that you can also demand for volume discounts because you will be placing a huge order.

Cost cutting tips

Cost cutting strategies are limited only by your imagination. Here are some tips to help you save.

  • Refrain from focusing only upon the top 100 or so office products in your inventory; overlooking the rest may mean failing to properly evaluate up to 70% of the organization's total annual spend.
  • To cut down on paper usage, use both sides of each sheet when printing internal documents.
  • Take a close look at non-branded office products; it is possible in many cases to spend half as much for equivalent performance.
  • Turn off the lights, computers, electronics, and adjust the heat/air accordingly when you leave the office overnight and on weekends. Conserving energy saves money as well as resources.
  • Request confirmation directly from the paper mills to verify price increases, and take advantage of any drop in prices to reduce your pricing.
  • Take advantage of early-bird discounts. For example, most office supply stores offer their customers a nice discount for ordering holiday cards and gifts in September.
  • Remanufactured toner cartridges are available from a number of major vendors and are a safe viable alternative to new at often half the cost.
  • Forego lavish holiday gifts. Instead of sending your best clients expensive gifts this year, make charitable contributions in their honor or consider hosting a holiday open house.
  • Request bids from new vendors for the materials that you use to make and/or package your products. Comparing services and renegotiating prices with your current vendor can get them to offer you a better deal, thereby saving you money.
  • Limit business travel whenever possible. Try video-conferencing rather than meeting face to face. Microsoft Live Meeting video-conferencing software and many other software/services available today allow you the convenience of meeting without the hassle and cost of travel.
  • Lock in negotiated pricing for the entire term of the agreement.
  • While comparing products ensure that the unit of measures is the same. With thousands of separate items being purchased each year it becomes difficult to compare apples to apples.
  • Implementing specific product blocking reduces expenses by preventing inappropriate purchase decisions.
  • Verify on a monthly basis that the vendor's product codes have not changed; product code changes present an opportunity for price changes.
  • Be careful when accepting incentive checks. You will be paying more for the items you purchase which may off-set your incentive and it will be difficult to change vendors often requiring payback on a portion of the incentive.
  • Avoid being locked into an exclusive vendor relationship. You should always have the ability to switch vendors without incurring any financial penalty.
  • Consider locking up your office supply storage cabinet/room. Institute a buying freeze on anything but essential supplies and make use of all of those free notepads and pens that you've collected from vendors and reps. Ask employees to use what they have on hand in their desks, pencil jars, and briefcases before they take from to the supply cabinet.