Purchasing for the smaller company
By Theresa Peterson
Maid to Order House Cleaning & Independent Cleaners Purchasing Alliance
Imagine you’ve found the perfect bathroom cleaning chemical. It works better than all other cleansers that you have tried and works on all types of surfaces, including marble and stone. It is not harsh on the skin or to the lungs. It has a pleasing scent and your customers all love it. Now imagine that your locate distributor of this product suddenly quits supplying it.
This is the scenario that I was faced with recently. Being a former Purchasing agent, I figured "what the hey, I know how to go about purchasing directly from the manufacturer". So I set about on a mission to get an account with the manufacturer so that I could continue to use the wonderful products that they provided.
Little did I know, I was about to learn a lesson in just how hard it is to be seen as the “little guy”. I did my research and located the web site for this manufacturer. On it was a section where you could request the MSDS sheets and pricing for various lot sizes of each of their products. I checked off the products that I was interested in and the quantities of each of the products that I wished to purchase, filled out my companies information and sent the order on its way.
My first response was that no information had been attached to my e-mail. I repeated the process double and triple checking that I was filling out their on screen order sheet correctly, and resent the order. Second response this time sent directly from the owner of the company said that I should quit sending blank e-mail orders. (note: imagine my surprise when all of the MSDS sheets for each product was mailed to me, I thought it was a blank order?) I then tried to call the company’s 800 # and place an order. 3 calls netted no responses. In the mean while I have to find another product to hold us over until I am able to broker a deal to purchase directly from the one company. Needless to say, all other products were not up to our standards. We continued to be very hopeful to be able to open negotiations for approval of purchasing directly from the company or at the very least to locate another local distributor of their products.
I now start to send e-mails directly to the president of the company and explain what it is that I am trying to do. I even offer to become a distributor as I have a resale license and the capabilities of redistributing to others. He e-mails me back that they have a policy to only sell to a hand full of selected distributors and that it is against their policies to sell directly to the end user. Ok, can I have a list of their Distributors that are near my location? He agreed to have someone in his offices to send me this list.
Then Nothing................
I make another request; same result, try again the 3rd time and still nothing. Needless to say, I am done with attempting to give business to a company who offers no customer service and support.
This incident did however pique my interest in the plight of the small business owner being seen as a significant purchasing power. I then started to ask questions of others in the cleaning industry both residential and commercial as to their experiences with purchasing.
Here are a couple of other instances that were referred to me -
T. Nash called to place an order for vacuum bags and accessories for his business, 2 weeks later when nothing had arrived he called the company to investigate and was told that although they had his information that they were holding his order in order to process larger orders before his as they equated to more money to the company.
Kenny has placed orders to his local janitorial supply house that have been forgotten, misplaced, or tagged to wait to order until the janitorial supply could get more orders for similar products, thereby holding up his order for indefinite lengths of time. He also says that another problem that he faces all the time is that he often needs only small quantities of products but is forced to purchase concentrates that then sit and go to waste because he is unable to use all of it.
Kelly states that because hers is a retirement community the local Home depot and Lowe’s have cut the amount and types of cleaning products that they have available, refusing to sell even the mid level commercial products that are available thru out the rest of their chains (Zep and S.C Johnson)
Marcello needed to purchase 5 - 70 gallon trash receptacles costing to the tune of $125 a piece for a customer who needed them within 2 weeks. Despite giving a due date to the order, his supplier prioritized the order as low and set it aside to be ordered when they were ready to order some for their own needs to save them the extra freight on the items that they ordered.
Smaller business owners are often neglected and over looked as a significant buying power. These are but a few examples to demonstrate the need for a group purchasing coalitions, which can be set up locally within your own cities with other similar businesses or be in nationally in associations similar to ARCP. Many in the residential cleaning sector that are not associated with franchises do not have the buying power that is afford to the larger groups. There are some ways however that the smaller residential cleaners can save money on supplies without having to buy in bulk.
1) Whenever possible seek out your local janitorial supply houses and ask if they offer discounts to smaller businesses. Most will offer at least an additional 10% off on purchases for those in the cleaning industry.
2) When purchasing thru a janitorial supply ask for “concentrates”, by mixing your own dilutions you can often save up to another 30% or more off of the cost of individually packaged chemicals. (Windex for example sells a concentrate that can be mixed 6 to 1 with water to make 6 gallons of finished product. The cost of the concentrate is just over the cost of purchasing 2 gallons of pre-made, so essentially giving you 4 gallons for free)
3) If you use a lot of any given item and have area to store it, ask for a bulk purchase rate. Can you purchase a case at a time instead of a bottle at a time? Are there discounts for purchasing 4, 6, 8 case lots? Is the product available in 55 gallon drums?
4) Remember to ask your supplier representative to recommend other products that work similar to the product that you like but may cost less. Ask if they can get you samples and try these products for yourself.
5) Avoid making your purchases in grocery store, discount stores, etc… the products are not packaged for quantity and are actually quite expensive. (1 bottle of Kaboom costs almost as much as a gallon of Zep shower and tub cleaner. While the gallon of Zep will clean approximately 4 x as much as the bottle of kaboom)
6) Join with others to form an alliance for your purchasing needs (www.independent-alliances.com was born out of frustrations such as those mentioned above)
Do just a couple of these things can cut your bottom line on supply costs dramatically.
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