As a construction business, bulk purchasing can be a highly effective strategy.
Planning for bulk purchasing can get a bit cumbersome, but the long term rewards and impact on your profits could make the effort well worth it. Purchasing in high volume makes the most sense when the contractor is working on projects that use the same materials site to site. Package materials also can be grouped together such as lighting, distribution and other systems. Many of these supplies cost less the larger the order and the larger orders are easier to negotiate as well.
For this strategy to be effective, the contractor should target and bid on similar projects and plan the use for the bulk purchased items. Those items that may be unique should be planned separately or purchased in bulk after securing a contract so billing does not falter for stored materials.
It is very important to consider the costs associated with storing the inventory. These costs include having a building or rental space and also the cost of moving the materials time and time again. The bulk purchasing strategy requires the skill of maintaining inventories and setting aside job materials in a queue if you do not want your efforts to go to waste.
Contractors that can manage bulk purchasing program can influence competitive markets and create nice work backlogs. Bulk purchasing can be a way to save in the long run and set your company apart from the competition.
By: Ron Soltis