Rethink How You Buy Office Supplies
You’ve heard it before, and you’ll hear it again: Cash flow is king, especially during tough times like these. But have you taken action to improve your cash flow? Many businesses do so by first considering ways they can get more money coming in the front door, then thinking about easy measures to control costs: saving energy, cutting worker hours, bringing a bag lunch. Those aren’t bad ideas, but that’s the low-hanging fruit. Aim higher by reviewing your entire purchasing program and you may save a lot more.
Like many businesses, you’ve probably been buying from the same suppliers for years, simply because you’ve built relationships and because, well, it’s just less hassle. But consider these smart purchasing habits and you may improve your cash flow noticeably.
Don’t bulk up. You can usually get a discount if you buy in bulk. And you should, if you know you’ll be using whatever you’re buying in the near future. But remember: Inventory or supplies sitting in your storage space is the same as cash gathering dust on a shelf. Think of cash as your employee. It should be working for you -- making payroll, paying bills -- not loafing around the office.
Review your vendors. You may have been buying for years from Chuck’s Office Supplies just because Chuck is a good guy. This isn’t unimportant. Your long-term relationship with Chuck could mean he gives you a nice discount, extends you more credit, or cuts you slack on payment terms. But remember that you’re not in business for Chuck’s benefit. If you find a much better deal, you may have to make a tough decision and part ways. Or you can take that better deal to Chuck and ask him to match it.
Don’t be shy. A lot of small business owners think requests for purchases are for the big guys. That may be true when the economy is booming and vendors are up to their pocket protectors in purchase orders. But these days every customer is an important customer; so don’t hesitate to submit RFPs to many suppliers and choose the best deal.
Join a buying group. Large companies can negotiate discounts by purchasing in bulk. But we’ve already decided this isn’t a good idea for your small business because big orders can mean operating capital sitting around instead of operating. But you can team up with other small businesses in your industry and achieve the same discounts as large companies by joining a buying group. For an overview of buying groups, check out Opinion Research Corp.’s Guideline: Buying Groups.
Make a trade. More and more businesses these days are saving money by spending what they have (their products or services) instead of what they don’t have (cash or credit). In other words, they’re bartering. You can form your own barter relationships with other local merchants -- maybe you already have -- and you can also join a broader barter exchange. A Web site called Business Helping Business has a feel-good barter network in which “needs” and “haves” exchange favors on an altruistic basis (which might work for you if you believe in karma). For an extensive catalog of traditional barter networks, have a look at a site called the Gigafree Network, which shows exchanges from AAA Barter of Central Florida to XYZ Barter Exchange of Tustin, California. Or just go to your local Craigslist and look for “barter” in the “for sale” category.
Earn rewards. If you’re a Bank of America cardholder (credit or debit) enrolled in online banking, you can go to Bank of America’s new shopping site, Add It Up, and get as much as 20 percent cash back when you use your card at one of the 300 or so participating retailers, including Best Buy, Wal-Mart, CompUSA, Dell, Staples, and Office Depot.
Shop online. Of course there are also scads of other Web sites where you can find good prices on supplies from software to bulldozers (really). One of the biggest is BuyerZone, which offers free price quotes from many vendors. The site also has helpful articles with impartial advice from purchasing experts and price guides that show what other businesses paid for products they’ve bought at BuyerZone. Also look at Better Buys for Business, where you’ll find an extensive list of guides for purchasing office equipment that features model reviews, price comparisons, and advice.
Tom Stein has contributed to leading business and general interest publications including Wired Magazine, Business 2.0, Venture Capital Journal, and Tennis Magazine. Previously, he held staff-writer positions at the San Francisco Chronicle, Red Herring, and InformationWeek. He also was a senior editor at Success Magazine, where he covered some of the most unusual and utterly unique entrepreneurial companies in the world.
