Welcome back to our supply inefficiency video series. Today, let’s explore the cost of buying direct.
It might seem better to purchase inventory directly from the manufacturer or supplier, but the cost of doing so includes more than just the purchase price.
Depending on how many different suppliers you’d need to work with, costs associated with transportation, procurement and production may add up fast.
In addition to these costs, if you are buying direct, you may not be entitled to the discounts or quick lead times that are available to a distributor who works more frequently with that supplier.
Imagine if you were able to condense all of your purchases into one. Not only would there be fewer deliveries to deal with and less time spent purchasing and stocking inventory, but everything you need would arrive together.
Consolidation also means more buying power, which puts you in a better position for negotiation as well as moving you up the priority list, when needed.
In our next episode, we’ll discuss supply inefficiency number four, freight, so come back to Falcon Fastening soon.
Thanks for watching.