Understanding your office supplies spend – Profit and margins

Posted on Oct 20 2010 - 11:26am by Peter Millikin

If you’re responsible for buying the office supplies for your company you will know how many stationery companies want your business at the moment. Perhaps you’re one of those companies that receive hundreds of phone calls promising cheaper products and better service.

Towards the end of my career in office supplies I used social media and companies made appointments with me rather than me having to phone them! However, many salesmen are still like Derek Wilton from Coronation Street, they just don’t have the paper clip on the roof!

While helping clients save money on their office supplies I only ever really dealt with high end spending accounts where I could justify the buyer’s time. The savings could sometimes be thousands of pounds which gave me great job satisfaction.

Until a cost analysis was carried out it would be guess work to how much could be saved but it was normally anything from 10–20 % per year.

Knowing the industry and suppliers as a whole many office supplies companies aim to make a profit margin of 30-40% from existing customers (even in a recession) And with “new business” the account can start at cost price just to WIN the account which is stupidity!

Loyalty in business now comes at a high price if you’re working with the wrong type of organisation. If you can’t screw down your current suppliers to running the account at lower levels of profit, around (15-20%) perhaps it’s time to look at a new supplier that will help you cut costs. Consolidating a number of suppliers to ONE can also tremendously reduce your expenditure.

Once you have found a new supplier you need to monitor the items you buy and the pricing structures you’re given. Many office supplies companies can start swapping branded products for generic products, these have higher profit margins they won’t generally pass on to you.

Review your pricing ever quarter with a new supplier and your existing supplier to keep pricing structures competitive.

If I can help people save I can help suppliers grow. Please share it with your friends and followers by using the social buttons!

Read about the Author

Peter has received many accreditation's including many from the Times Online. As founder of You Could Save (2005) and What Stationers (2007) Peter regularly helps consumers and national organisation ‘save money’. He believes that the only successful way to bring people together online is to provide an open marketplace where people can all work together in a friendly, unbiased environment.

Like us on Facebook
on Facebook

Follow me on Twitter
Follow @WhatStationers on Twitter

Subscribe to our email list