How Vendor Consolidation Can Help Your Business Save

If you read our recent blog post on how vendor consolidation saved a church almost $20,000, you may be curious as to the other benefits of vendor consolidation, or how to start.

Having multiple vendors may seem like it’s not a big deal, but it actually has many hidden costs. According to a study done by The Hackett Group, it costs $700-$1,400 per year to source, maintain relationships, and process invoices for each supplier that a business has. These are all costs that are not apparent at first glance, but can add up over time and cost you both financial resources and valuable administrative and purchasing time.

The first step in consolidating your suppliers or vendors is to find a new supplier that is able to meet all of your current needs. FlexPAC has over 1,000 suppliers due to the high amount of product lines we offer, so all of the upfront work is done on our end to help save you time. These 1,000 relationships allow us to meet all of the needs your business may have. Vendor consolidation has several benefits. One is that having a consolidated vendor also gives you more leverage to negotiate terms and prices, helping to ensure that both you and the vendor are getting the best deal. Another is ease of compliance with regulations. As rules change, you only have to deal with one vendor to ensure that you are up to date. Working with one vendor also reduces confusion as you only have to communicate with one vendor. This helps to clear up a lot of issues that arise in employee/vendor communication.

The second step to vendor consolidation is utilizing good communication. Communicate your needs to your new supplier. Then, work with the supplier to help identify and overcome issues that you may have been having when you had multiple vendors. When so much time goes into sourcing, doing invoices, and replenishing orders, you may be missing issues that are happening with your current supplies. Identifying and remedying these issues with your new, consolidated suppliers helps to ensure that your new supply process is the most beneficial to your business. FlexPAC consulting services can work with your business to help identify these potential issues and come up with the best solution.

Lastly, relax and save on costs! With only one supplier, you will find it much easier to maintain your ordering process, you should have more time to spend on actually maintaining your facility and managing your business. You’ll also find that by consolidating, those hidden costs will be gone, meaning that you have more funds to continually improve your business.