The Power of Group Purchasing - Strategic Flow Management

The Power of Group Purchasing

Published on 3rd November 2021

A business’s marketing department can spend a lot of money on marketing materials, particularly if orders are coming from many different sources. Working with a service provider who specialises in branded marketing supply chains can help your marketing department harness the power of group purchasing, which can save your organisation a lot of money in the long run. That extra money can then be reallocated to other areas of the business. Here’s how it works.


Economies of Scale

It is much easier for your source to produce large amounts of marketing materials all at once, rather than producing them here and there as your need arises. The entire process, including producing, packing, and shipping the materials, only needs to happen once instead of several different times over a short period. Because of this, your organisation will likely be able to negotiate much lower prices for the marketing materials.

Reduction in Costs

Purchasing bulk orders can help your organisation save on freight costs as well. For each delivery, the costs of fuel, truck wear and tear, and driver compensation are all incorporated into the delivery charge. If the truck is only partly full, you’re not maximising the scope of those costs. In essence, two half-full deliveries will cost twice as much as one full one. Similarly, each purchase transaction will likely have an attached service or labour charge, which can be more efficiently utilised on larger orders.

Streamlined Ordering Process

Once your organisation has built up a steady relationship with your marketing materials provider, you will have a clearer picture of what exactly needs to be purchased each month. By monitoring these patterns over time, you can develop a general template for cyclic ordering. While your orders may change slightly from month to month, having a basic framework in place can make the whole process go much quicker. It also alerts your provider in advance as to what you are likely to need so that they can produce the materials in advance, rather than having to do it at a moment’s notice.

No Stock-Out Issues

Look for a service provider that incorporates inventory management systems. This way, your provider will be alerted when your organisation is running low on a particular marketing material and can produce more before you run out. This auto-replenishment eliminates the gaps between realising you need more of a material, ordering more and receiving the finished product.