If your business is thriving, it surely has reached its status because of a multitude of factors. The primary defining element of your success is, of course, your excellent products and services in combination with your brilliant knack for marketing.
Another aspect that may be propelling your business forward is your long list of trusted suppliers. The only catch is that this long list entails the practice of ordering from several websites or wholesale sources. Not only is this exceptionally time-consuming, but it may also cost more than it actually should.
If you can relate to this struggle, perhaps it’s time that you make the big switch to vendor consolidation. This best practice is a package deal with a myriad of benefits that you, your team, your company, and customers can profit from.
So, what are the benefits of vendor consolidation? Let’s find out!
Vendor consolidation, also known as supplier consolidation, is a handy supply management strategy that has been a popular choice of leading enterprises all over the world. This business practice features the process of minimizing the number of vendors you transact with, and instead forms a small group of dependable suppliers or even a single associate.
For instance, you order printer paper from one supplier while securing ink cartridges and toner from another. Aside from that, you also frequently purchase breakroom paraphernalia from a wholesale company that specializes in coffee, paper cups, and the like. On top of that, digital document management is sourced from one company while FollowMe printing is purchased from another supplier.
To streamline all of this, you’d want to merge as many of these categories as possible. Taking this step helps you save time and reduces expenses dramatically. As a result, you can channel your energy into the more important tasks at hand.
When you have too many vendors that you rely on for supplies, you tend to overspend on time. On the other hand, when you choose to consolidate your list of vendors, your team can spend less time procuring materials, navigating between selling platforms, and making tedious trips to the wholesaler.
When you have a smaller group of suppliers or even just one vendor that you acquire your business necessities from, your team can place orders fast and seamlessly.
You want to save on money just as much as you want to save time. As a business owner, it’s one of your biggest responsibilities to ensure that your practices are cost-effective without sacrificing quality. With vendor consolidation, you can find this equilibrium.
In terms of vendor consolidation, there are two driving factors in the realm of supplies – hard costs and soft costs. Hard costs pertain to the amount you pay for an item, whereas soft costs are the internal expenses directed towards procuring an item – yes, buying an item is more extensive than we thought it was!
More often than not, more costs are allocated towards identifying the correct product, generating a purchase, placing an order, and distributing the order.
In short, if you are looking to optimize your budget, the best method you can use to minimize your soft costs is vendor consolidation. Once you make this positive change, you will be able to place orders in higher volumes, get better prices, cut down on shipping fees, and enjoy more affordable handling costs.
Relying on several suppliers can make it challenging to forge close business relationships; simply because there are just too many of them.
However, when you have fewer vendors that you work with, it’s more likely that you can manage to build strong professional relationships with them. Once trust and value are established, your vendors will have a more in-depth understanding of your business’ specific needs. This comes in handy when you have special orders or need immediate assistance if an issue arises.
On top of that, when you partner exclusively with one or two suppliers, business flows back and forth between you. You’re bound to experience faster and clearer communication. As a result, your vendor partners are likely to become more invested in your company and will be set on maintaining a valuable, long-lasting partnership with you.
Spreading operations across a network of multiple vendors dilutes your buying power. This is because you have been inclined to make small sum buys with each supplier, reducing purchasing opportunities to partner with vendors that may be more suitable for your business.
On some occasions, this could decrease your brand’s value in the perspective of vendors, as you appear to be limiting what you could be investing in their products or services. In turn, your scattered operations could pose a negative impact on your vendor relationships.
This changes when you find a single partner. You will experience an increase in purchasing power, such as more leverage to negotiate for favourable contract terms, access to exclusive discounts, or other great benefits.
Among the many perks of vendor consolidation, we can tell that you’ll especially love the improved visibility and control that it offers.
Monitoring your expenditures is a responsibility that can be challenging and inefficient, especially if you have vendors in every corner of the city. This is where vendor consolidation clears out the confusion and replaces it with sheer clarity.
Vendor consolidation gives you a clearer view and more control over your supply chain, making it uncomplicated and optimized.
Start consolidating your supply chain by getting ahold of the comprehensive digital document management solutions provided by Integr8.
From cloud printing management and managed print services all the way to performance-enhancing document services and print security audit programs, we’ll make sure they are all seamlessly integrated into your workflow.
Reach out to us today to learn more about our office solutions!