Does shopping around really make business sense?

We do it for private purchases – but for our business purchases?

It’s coming up to holiday season, and for many of us that means buying things we would not normally buy. Often when you go from shop to shop items are generally the same price or within a pound of each other. Indeed when I travel to Dubai, I have stopped shopping around. I am sure the whole place is price fixed… to the Dirham – of course you can negotiate for free extras. But they won’t discount.

Saving money

In these times of austerity, and challenging business conditions, we know that less of us are spending, and for many organisations this means fewer sales. But are we partly to blame ourselves?

Today I have been purchasing materials for an upcoming series of courses. This is a relatively new course to us in the healthcare sector, and is becoming increasingly popular. Normally I go for convenience and aim to place a single order with one supplier, however something inside said “shop around”.

The price for the three items from the identified supplier was:

The Box I know from previous research is significantly cheaper than other suppliers – most starting at £100+. The other items however were much the same as others or so I thought.

After just 20 minutes I found a number of alternatives.

A quick internet search for the light (same model) and I found UK suppliers with prices ranging from £4.95 to £19.95. The only difference? The more expensive suppliers were focusing on an application rather than the item itself. While his may have been a valid strategy in the past, in an internet age is it sensible now?

The bottles were also interesting. I could only find 5 suppliers, all did their “own brand”, so not an exact like-for like, however the contents for all intents and purposes were the same. These varied from 0.056 to 2.01 per ml

Interestingly one company selling the bottles has two different websites, one “general” the other application specific. On each site the price for the identical product is different!

Although the higher of these prices is still good compared to my first supplier, the lower price for the identical product is more appealing!

So in terms of savings

Just taking 1 hour to search showed this:

And that is just per pack. The total savings when multiplied up are significant – 16 sets were bought!

Things like this could make the difference between breaking even or making a profit on an event or product line.

Why?

If the first supplier had been just a little more expensive for the light and bottle, no doubt I would just have placed one order, Indeed I have bought these items from them in the past. Bit at a 50%+ variance, that just does not make business sense. They as a supplier have lost out on cash-flow, I am sure the Box is almost a loss leader, and in time the box will be re-used, but the bottles will need replacing. Future business they have lost.

It is hard for a business to reduce prices, however a greater market share and repeat business must be the goal. Sure there is a point at which business is not sustainable, but these other organisations are doing ok.  Some markets may not appear price sensitive… but if not today then tomorrow!

Those 20 minutes saved me over £200 this time, and each time I run the training I will save the same each time – a great result!

When was the last time you did a SWOT & PESTLE analysis on your business, and the environment in which it was in?