How Ordering in Bulk Can Benefit Businesses

Buying in bulk presents many benefits for businesses and organizations. Although purchasing business supplies in large quantities initially comes with a larger price tag upfront, the price per unit is far cheaper and will save you money in the long run.

For example, I sell stickers in bulk. If you were to purchase 50, 2-inch stickers to tie you over just for one month, it would cost you $39 or $0.78 cents per sticker. However, if you were to purchase the same size stickers but in a set of 250, they would cost $75 or $0.30 cents per unit and last five months instead of just one. Rather than purchasing smaller quantities more frequently, buying in bigger quantities upfront will save you a lot of money.

Is buying in bulk right for your business?

Advantages of Buying in Bulk

Saves Money

Whether it is because of the significant discounts or savings on shipping costs, there are multiple ways buying in bulk can save you money. Brandy Rekitt with POS Paper advocates that the larger upfront expense will yield savings overtime, especially for supplies that are frequently used within your business.

Saves Time

Buying in bulk really can be a continence. For a busy individual, Business Development Manager, Zawar Ahmed, wrote on LinkedIn that buying in bulk will keeping you from having to make frequent trips to the store ultimately saving you time. This is also helpful for people who live far from the store or have limited access to transportation. Although now days anything can be ordered online, deliveries still take time to arrive. Besides, the you’ll save time counting inventory and placing orders focusing your energy elsewhere on more important tasks.

Is Better for the Environment

When purchasing items in bulk, it can reduce the amount of packaging waste you generate. Frequent small orders will require more packaging supplies, more shipments, and more fuel contributing to air pollution. Buy generating fewer shipments, you can significantly reduce waste and your carbon footprint on the earth.

The Risks of Buying in Bulk

While buying in bulk has it’s benefits, it is important to look at the full picture. What’s the downside? As a business, it's important to ask yourself what's best.

Could Lead to Product Waste

Depending on what you’re buying, you may have to buy in quantities such as foods with a shorter shelf-life. Buying in bulk could lead to wasting product. If you purchase too much of something and it doesn’t sell, it expires, or you don’t end up needing as much as you purchased, you might end up wasting the product and your money. Frank Addessi points out in SmartAsset that buying more product or supplies than you can use before it goes back includes a hidden mark-up when you purchase in bulk that everyone should be aware of.

May Create Limited Storage

When you purchase anything, you need somewhere to store it. It’s like purchasing deodorant or toothpaste. Often these products come in two packs. You’ll open and use the first one, but do you have somewhere to store the second one? Buying in bulk is just like that, you need the storage space to keep all of your extra products and supplies. You don’t want your workspaces to overflow becoming messy and disorganized because that will just create a whole different problem in itself. Not only do you need the extra storage space if you’re going to buy in bulk, but your current storage place will also become limited as it fills up.

Can Cause Accrued Interest

Are you making these bulk purchases on a credit card? Veronica Matthews with The Penny Hoarder advises being cautious with your credit card because if you can’t pay it off, you will rack up interest. Credit cards can be helpful for businesses by offering different rewards and benefits, but if you do not have a consent inflow of cash to pay it off, they can come with a pretty hefty cost. If your minimum monthly payment is $50 for example, your current balance is $200, but you tag on $30 of monthly interest, how much are you really paying off? Instead of paying $50 off what you borrowed, you’re now paying interest as well for borrowing the money and not being able to pay it off quick enough. This will only prolong your ability to pay off your credit card, so make sure you can afford the bulk purchase or you can pay off the purchase before interest accrues. Otherwise, it may not be worth it.

All-in-all, there are pros and cons if you want to purchase items in bulk for your business. There are many benefits to consider, but always weigh the cons of your decisions because it may not lead to the better outcome you are hoping for.

It’s also important to note that you don’t have to buy everything in bulk. Pick and choose what you should buy in large quantities and what might be better to just purchase in smaller quantities.