The below post will recommend an example of how you can benefit from purchasing supplies in bulk. With the rise of gasoline increasing freight costs and the general state of the economy everyone can afford to save - this is just one way that can benefit your business’ bottom line.
When purchasing cad materials or heat transfer vinyl for your vinyl cutter it is imperative to leverage pricing from your supplier. Brands of material can have a cost difference of $1.00 - $2.00 per yard depending on the roll size ordered. Another factor that comes into play is freight costs. View the figure below to find realize the advantages in investing in a stock of primary colors of cad-cut once you settle on a supplier.
Customer Johnny X just invested in a vinyl cutter 1 year ago. He has been doing well with his cutter and has sold a lot of jobs to various teams and businesses. Here is his purchase history over the last 3 months in White to show you an example on just one color.
January 12th 10 yards of white for a job / paid 6.75 per yard plus $13 in freight: Total 80.50
January 20th 5 yards of white / paid 7.00 per yard plus $12 in freight: Cumulative 127.50
February 1st - 25 yards of white / paid 6.25 per yard plus $14 in freight: Cumulative 297.75
February 7th - 10 yards of white to complete job / paid 6.75 per yard plus 13 freight: Cumulative 378.25
February 19th - 15 yards of white / paid 6.75 per yard plus $13: Cumulative 492.50
February 27th - 50 yards of white / paid 5.75 per yard plus $15: Cumulative 795
March 3rd - 10 yards of white for a job / paid 6.75 per yard plus $13 in freight: Cumulative 875.50
March 15th - 10 yards of white for a job / paid 6.75 per yard plus $13 in freight: Cumulative 956
March 24th - 30 yard of white / paid 6.25 per yard plus $35 in freight for rush: Cumulative 1178.50
Total yards of white used at the end of 3 months = 165
Total dollars Paid to vendor = 1178.50
If Johnny X would keep a stock of white material and would have purchased 200 yards at the beginning of January he would have paid $948.75 for his 165 yards used + $25 in shipping for a total of $974. Johnny X could have saved $204.50 just on white material. I won’t post the entire history but when you factor in his other 7 core colors used, he would have saved $1300 in total in just 3 months - making his new purchasing plan a way to save him over $5000 this year.
Get the point?
Now, don’t overstock in odd colors like Cream and Taupe, but identify your best sellers carefully and stock up.
To get you started, historical data shows that White, Black and Red are the top sellers with Navy, Royal and Yellow or Athletic Gold coming in next. Take into account your demographic as well - consider stocking up on Pink if your target market is females. Also, consider local school colors.
The other benefit to this plan is that having material in stock could also be the difference between getting a job or not, and I can’t begin to assign a value to that.
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