How to Choose an Office Supply Vendor - Pricing
by Diana L. Martin
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
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.
Here’s how to make sure you get the best pricing.
The ABC's of pricing:
Make a list of the items your company orders repeatedly if you don’t already have one. Inquire as to whether the vendor has any sort of pre-made frequently ordered products list and ask for a copy. This list will normally contain their house brand items and will help you locate those items quickly. House brands provide significant savings over name brands and, more often than not, are equal in quality. For example, a box of Acco small binder clips will cost $1.24 on our site, but our house brand will cost only $0.39. We also offer a 40-ct container ($1.47) and a pack of 12 boxes ($4.99). Office Express has a list that we’ve put together to make it easy for you to find the everyday necessities. It’s called the Office Essentials List and it’s posted on our website. And, lest you think the big box stores will be cheaper yet, as I write this, on Office Depot’s site a single box of their house brand small binder clips (item 429415) is $1.89. Staples 40-ct box (item 831594) is $4.79 and their pack of 12 boxes (item 480114) is $9.99.
Give the vendor the list of your frequent items and ask them to create a custom price plan for those items for you at their best price. Ask them to hold that pricing for a year.
Commercial units of measure save you money. Notice that I said “commercial,” not “bulk.” They’re not necessarily the same thing. You don’t have to buy Costco-sized packages to save money. Small offices don’t need a 96-count carton of paper towel. In a previous installment, I showed you some sticky notes that were sold on Amazon for $5.99 per pack of six pads. That’s a retail unit of measure. Our equivalent house brand item sells in a commercial unit of measure (12 pads per pack) and was only $7.79. That’s quite a savings.
If you’re purchasing a large quantity of an item, ask for a quantity discount. You may or may not get one, but it doesn’t hurt to ask. Some vendors have set price break points and others, if they don’t have official price breaks, may just give you one if you’re a good customer.
Save money by using a true single vendor. Online marketplaces are one website, but they’re multitudes of individual sellers. With a true single vendor, especially one local to you, you develop a relationship and with all your purchases (read: volume) in one place, you have the power to negotiate prices. In the commercial world, pricing tiers are based on volume. If you cherry pick and spread your purchases out over multiple vendors, the volume is low and there is no incentive for the vendor to offer better pricing.
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 you buy. 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 number, size and unit of measure. If you're not comparing apples to apples, the vendor may be hesitant to believe the information you provide in the future. If the difference is minimal, you’re actually negating the savings and costing your company more money by spending company time asking for that match. Remember that time is money and all the time you spend comparison shopping adds to the final price of the item. If you single source your supplies and develop the relationship as I mentioned earlier, you’ll find that your single vendor is lower most of the time and you shouldn’t have the need to comparison shop.
Be smart - 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 vendor is running a loss leader and they're making their profit on you someplace else. The better deal is going to be the vendor 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? If you need to order below the minimum, will the dealer accept the order and will they charge you a small order fee? Is there a delivery fee? What about a handling fee? All of these add to the overall cost of the order and are good things to point out to a number-crunching boss.
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 January 10 for our last installment in this series, which will cover Payment Terms and Refunds.