Outsourcing purchases is an advantageous way to reduce costs in a company.
Especially for SMEs, where every euro counts, opting for this solution will allow you to spend less on essential supplies and services for your company’s day-to-day life.
In the end, it is about achieving strategic advantages that allow us to compete more effectively in the market.
Purchasing management is one of the most critical aspects that you have to face in any society and, in many cases, is not given the importance it deserves.
In a market as changing as the current one, the flexibility offered by purchasing outsourcing allows us to create more dynamic and adaptable structures to the different scenarios we may encounter.
This improved adaptability is one of the best features that can be optimized in any business partnership.
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Why Outsource Purchases?
But let’s get down to business. What are the specific reasons why outsourcing or outsourcing is a good idea?
Why is it better than doing everything from within the company?
There are quite a few benefits and advantages that we have to consider if we consider leaping.
Lower Cost In Personnel
One of the most obvious advantages of outsourcing purchases in a company is the lower personnel cost.
By managing purchases from outside, we will not need as many people or dedicate as many hours as it was done from within the company.
A single person who works with the external purchasing center will be enough.
This also means more savings if the acquisitions are not working as they should.
We have already outsourced and are not satisfied with the head office or consultancy that is taking us the purchases or if we have not done so yet and we want to fire those responsible.
Changing outsourcing services is much cheaper than having to face layoff.
This does not mean that the company’s purchasing department has to be closed.
Other functions such as managing orders, incidents, inventories, budgets, or strategic decisions have yet to leave the company itself and cannot be outsourced.
Greater Bargaining Power
Another clear advantage of outsourcing purchases is improving our bargaining power with suppliers.
The company specializing in purchases will exert more significant pressure on the final prices, which directly allows us to enjoy a lower cost.
By ordering larger quantities, this is also an excellent advantage for the supplying company, which can save costs by ensuring a higher demand from its material suppliers.
To understand it, it is not the same to ask for 100 packs of folios as 100,000. Or bring a phone bill to get 50.
The acquisition of large volumes always reduces prices, both in physical products and services.
Total Transparency In Operations
The purchasing centers and companies specializing in acquiring goods and services offer total transparency with their clients.
In this way, the hiring company will always have all the information it needs and ensure that it receives the best possible service.
They do not have suppliers in their shareholding so that they are not tied to anyone.
By offering us maximum transparency, we will see how they do to generate considerable savings in attracting supplies and services.
On average, this saving can reach 10% compared to the previous expense.
In our experience, in some items such as insurance, cellulose for toilets or telephony, it can even exceed 20%.
Maximum Investment Control
On the other hand, we cannot forget that although an external company manages purchases, our SME continues to maintain all control.
If we don’t like how the purchasing and service center works, we can always change.
Within the contract that we sign with the external company, we will have all the characteristics of the service that will be provided to us and the formula for canceling the contract.
Even if we want to cancel the contract and we may have to pay the penalty for breach of it, it will still be cheaper than replacing our department.
Likewise, there are sufficient guarantees to avoid reaching that point in most cases. The usual thing is that when you choose to outsource purchases, the possibility of canceling it does not even cross your mind.
In any case, it is always good to have an exit, which must be clear at the time of hiring. In this way, we will avoid unpleasant surprises.
Better Handling Of Possible Crises
It is also necessary to point out the best handling of potential crises by being backed by an external purchasing company.
If there is a problem with the supplier, larger quantities of any material or product are required urgently. There will be a more significant margin for maneuver.
More excellent facilities will also be provided from the supplier side, since being a small SME is not the same as being one of its most important clients.
At the same time, it also means greater ease of management.
Contacting the different supplier companies from the purchasing department is not the same as speaking only with the responsible person at the purchasing center.
A significant time is saved in procedures and paperwork by having a single interlocutor and not managing each order in a differentiated way.
A Closer Relationship With Suppliers
By outsourcing purchases to a specialized company, a better supplier relationship is also achieved.
Those responsible for the purchasing centre will recognize customers and try to make them happy.
For a supplier, losing a client as a purchasing consultancy can be fatal for their business, so they will endeavor to respond to your needs and offer you perfect conditions.
As we’ve already discussed, cost savings works both ways, and both companies get more for less and the suppliers themselves.
These have higher committed volumes and can acquire raw materials more economically.
Likewise, it also means savings in management time for them, who only have to talk and negotiate with a company to bring their product or service to the customer.
This also affects the supplier’s relationship with the consultancy and the final prices.
Work With Experienced Professionals.
One last reason to outsource purchasing is consulting or purchasing central professionals.
Having professionals with extensive experience in the purchasing department can represent a substantial financial outlay for a small business.
However, by outsourcing the service, great professionals of recognized solvency can be counted on without bearing the expense of having them on staff.
The purchasing centers have great specialists with many years of experience who know the market offer by heart and know where to find the best deals.
It is a way of working with the best when the economic situation of the SME does not allow working with the best internally.
How Can You Save By Outsourcing Purchases?
When it comes to saving costs in a company, there are several common elements to get better prices.
From electricity to mandatory insurance, through telephony and internet, messaging or office supplies.
You can also save a lot on defibrillators, cleaning services, cellulose for toilets, etc …
Buying from an external company, the prices are much lower, and adding each aspect can be a considerable amount to consider.
On the other hand, we can also save on the specific materials of our service or product, which in many cases represents the most fundamental savings to clean up the accounts of an SME.
The first step we recommend before outsourcing purchases is to audit their status.
A consultancy like ours can be in charge of checking the expense items and offer other possibilities to save on products and services.
In this way, you can know from the first moment how much you can save and thus decide on outsourcing only if it will make a notable difference in your business.
Do you dare to spend less on your SME? Contact us without obligation, and we can help you achieve it quickly. Take a look at other success stories.