We have all been to the supermarket at some stage to buy our favorite breakfast cereal.
At the larger supermarkets where they have the most variety and quantities, you will often find your favorite cereal in at least three different sized packaging.
The smallest size will be the cheapest, but contains the least product, while the largest will be the most expensive, but contains the most product.
If the smallest size weighs 67 ounces at $2, the middle-sized weighs 1 pound 10 ounces at $3.50, and the largest size weighs 2 pounds 20 ounces at $5.00, then you can see that the largest package of cereal costs the least per ounce.
If you were able to buy the same cereal in one package that has ten times more product, it would weigh 22 pounds, but you would expect to pay much less than ten times $5.00.
These are simple examples of bulk buying.
The bigger the quantity of a product that you buy, the less it costs per unit, regardless of whether that unit be by weight or number of individual items.
In business, you can take advantage of bulk buying just as you would with your weekly grocery shopping by buying your office supplies in bulk and any other items your business needs continuously.
Office supplies are not just photocopy paper but can include anything from a stapler to office desks and chairs, photocopiers, filing cabinets, computers, and much more.
Here are three main advantages of buying in bulk.
Just as with the cereal example given above, businesses can save in the same way when ordering their office supplies.
If you are opening a brand-new office with ten new staff who all require their own desk, chair, computer, stapler, scissors, etc., buying ten of everything all at once will be less expensive than making ten trips to the same business and buying one of everything each time.
You will want tea and coffee for your staff. You could buy these items from a normal supermarket, but most office supplies businesses also provide these types of products, but usually only in larger quantities, which will often work out cheaper than the supermarket.
One of the key reasons why bulk buying is so much cheaper is because less packaging is used in many instances.
Instead of buying 10 staplers in 10 packages, if you could buy a single package containing 10 staplers, that is a cost saver for the manufacturer and that cost saving is passed on to you.
But it also means the manufacturer is using fewer resources to make that single package, and that means less harm to the environment both in the manufacture of the packaging and in the discarded packaging once the staplers have been unpacked.
Time and Transport Savings
Bulk buying works the same when you factor in the transportation costs of a product.
If you can buy a product in bulk to last you six months, you only need to take the time to order that product twice a year and only need to travel to the retailer or pay for the product to be transported to you twice a year.
But if you bought a smaller quantity of that product that only lasted for a month, then you need to take the time to order that product twelve times a year and twelve times each year you have the transport issue.
Disadvantages of Bulk Buying
There can be some occasions when bulk buying may not be the best option.
- When you buy greater quantities, you need to have somewhere to store all the product.
- Sometimes a retailer might have a super special price on smaller quantities, and it could be cheaper to buy ten small items than one item that is ten times bigger.
- If items are perishable, you might have to throw some of it out because you haven’t used it in time. This can also happen with items that become out of date for other reasons, like advances in technology. For example, you might have purchased laptop computers for new staff starting in six months, but by the time they start work, the business has found that tablets are more practical for the work this staff will be doing.
- When you buy in bigger quantities, you are spending more up front. If you bought in smaller quantities, would the money you are not spending be better utilized in some other part of the business?
While bulk buying will not always be the best option for a business, most of the time it will result in significant savings and at the same time save on time and be better for the environment.