You can save BIG with Vendor Consolidation!
Instead of managing multiple suppliers in the same field, whittle your relationships down to a preferred supplier. Distributors who elect a one-stop-shop supplier gain huge benefits—and save money! What benefits? See below. Don’t believe it? Google it!
Easier, Better, Lower-Cost Management
– $700-$1,400 – That’s your internal cost to source a new supplier, set it up, negotiate with it, and manage it ongoing. Consolidate and save!
Reduced Purchasing and Processing Costs
– $50 to $200 more or less – that’s the cost to process a single Purchase Order depending on salaries, systems, overhead, etc.
– 9.18% reduction in cost for general equipment and supplies when the number of suppliers is minimized (per top quartile of companies observed1)
– Fewer invoices to process. It costs up to $14 to process one invoice, and 62% of the cost is labor, mostly associated with errors.
– Less time in supplier meetings, calls, and emails equals money saved
Lower Shipping Costs
– Lower average shipping cost is a major benefit of Vendor Consolidation. Often, this benefit alone is enough to justify one-stop-shopping.
– Shipping is determined by weight, type of service, zone, and item size, so consolidation yields better efficiency which means lower costs
Improved Supplier Relationships
– Fewer suppliers translates into more time for you to focus on improving quality, efficiency, and overall performance.
Better Prices for You
– When a primary supplier gets a larger piece of your market share, he can buy or manufacture more efficiently and pass the savings on to you.
Better Vendor Effort
-With fewer suppliers, those remaining have more at risk and are more likely to work harder to keep your business.
“The Benefits of Supplier Consolidation Extend Far Beyond Sourcing Savings” The Hackett Group. Pierre Mitchell and Christopher Sawchuck
APCC Research. Mary Driscoll
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