Why you should buy in bulk to save in the longer term

03/01/2019 | Share:

So you’ve started your E-commerce business and you know you have an excellent product. Naturally, you’ll want to get started as soon as possible but you’ll also want to gain as much profit as you can whilst maintaining a steady growth of your business.

How can you save more time and money in your Ecommerce business?

Let’s think about bulk purchase orders by taking a look at personal spending habits, such as food shopping.

Do you like to make small, daily visits to the supermarket? Or do you take weekly (or even fortnightly) bigger buy visits to a Wholesale store,  such as Costco?

By choosing the smaller daily visits option, this will incur higher food costs as you are buying smaller quantities more frequently and it might also incur more fuel costs to get to the store. But this might be due to lack of space or fridges in your kitchen, as you might not have the facilities to store larger quantities of food items. By purchasing bigger buys from Costco fortnightly, you will need more space to store your items but once purchased you will be set for a  fortnight; thus saving time, fuel and frequently expensive items and instead replacing them with wholesale prices for your food.

What are some key factors resulting from buying in bulk?

When buying in bulk you’ll be saving money per unit which will save you money over time. This is called Price Per Unit.

This will likely be the main point considered when discussing your prices with suppliers.

Another prevalent factor to consider when buying in bulk is less shipping costs or transportation trips. Using one bulk order instead of multiple and more frequent shipping will save shipping or freight fees. If your merchandise is couriered internationally you might save tax fees.

By sending one bulk package, you will save time and fuel This way, items are also kept together and may be easier to record, invoice or put into your stock.

It is also worth noting that by buying in bulk, will usually cut down packaging as there should be less plastic involved. By cutting down fuel and waste, you’ll be safeguarding the environment as well as increasing your overall profit which is win-win!

Overall, when you buy in bulk it enables the majority of suppliers to lower the overall price even though they will initially take a cut on their profit, they should feel more comfortable knowing the sale will be a certainty. Your suppliers will feel relaxed about selling in higher quantities for less profit as opposed to excess items produced sitting in their factory, unused and sometimes unwanted.

Manufacturers can sometimes get stuck producing more items that were initially ordered, yet ideally, they would rather not get stuck with excess merchandise. Many factories across the world will have a minimum production of 1000 pieces. If you only place an order for 750 of those 1000, the factory will still have to produce the extra 250 items. Maybe you will reorder- but if the merchandise is not selling in your store, maybe you won’t reorder. This means they are landed with the excess stock.

It is also important to note what product you are stocking and whether the items are perishable. Sometimes, purchasing food items in bulk is not advisable if they will not sell before their use by date.

Here at Ogdens, we specialise in E-commerce solutions, reducing your overheads and enabling you to keep on top of exactly how much stock you need, when you need it and in real time. By using our large warehouse facilities we are able to accommodate for bulk buying and for fulfilling extra orders.