As a small business owner, you know that purchasing decisions literally make or break your business. Nevertheless, carefully evaluating expenses and looking for ways to reduce costs makes it easier to be profitable. This is especially when first starting out. Entrepreneurs can get premium stock, fixtures, and other essentials at the optimum prices with smart shopping practices. This allows you to avoid paying too much on basic but necessary items, which in turn means that capital can be reinvested back into the business for expansion.
Compare Prices for Bulk Inventory
One key to keeping merchandise costs down is to buy inventory items in bulk quantities at wholesale rates whenever practical. Compare pricing from various wholesale distributors, such as Olympic Eyewear, on staple products like bulk sunglasses to find the best deals. Consider pooling together with other local, small business owners you trust to order truckloads for maximum cost savings. Splitting bulk shipments also saves substantially on freight expenses over individual orders.
Negotiate Better Rates
Don’t simply accept list prices from vendors and suppliers. Negotiate for better rates whenever possible, especially on large orders. Even shaving a few percentage points off can make a significant bottom line impact over time. Offer to pay upon delivery rather than on credit to leverage more favorable terms, monthly discounts or free shipping incentives that reduce overall costs.
Leverage Promotions and Sales
Timing inventory purchases to coincide with periodic vendor sales and promotions helps cut merchandise costs as well. For example, buying extra stock when it’s 30% off during a short-term sale event allows you to get months of inventory at a steep discount. You can then sell the merchandise at regular prices for a wider profit margin once the sale period ends.
Invest in Quality Store Design
While quality displays, fixtures and furniture may seem expensive in the beginning, these longer-term investments will pay for themselves over time. It is a well-known fact that well-designed stores not only attract more customers but also make them want to linger longer as well, boosting sales. Sturdy, durable store fixtures and furniture won’t need frequent replacing either compared to cheaper versions. Consider buying floor model or lightly used display items from retailers going out of business. These cost a fraction of buying brand new.
Minimize Credit Card Processing Fees
Small businesses spend thousands annually in credit and debit card payment processing fees. To cut these costs, compare quotes from various merchant processing service providers. Negotiate the lowest rates possible for your average monthly volume. Consider offering a small discount for cash payments to reduce your processing expenses when customers pay with cash. Just be sure to display proper signage about any cash discounts per state laws.
Purchase Used Equipment
When buying essential equipment like point-of-sale systems, computers, printers and furniture, consider quality used options first. Well-maintained equipment bought from other businesses upgrading their systems often costs 50-75% less than when buying brand new. Nevertheless, be sure to factor a bit of budget for any minor repairs or maintenance that may be needed down the line.
Take Advantage of Free Resources
Don’t overlook free resources that can help new business owners keep expenses in check. Small Business Administration offices provide mentoring and guidance on managing inventory, marketing, budgeting, pricing products profitably and more. Local colleges often have small business development centers offering free consultations as well. Use these knowledgeable resources to develop smart financial strategies.
Conclusion
Carefully tracking all business expenses and using smart shopping strategies reduces costs substantially for small store owners. Comparing prices, buying in bulk, negotiating better rates, timing purchases properly, buying high-quality used items, minimizing credit card processing fees and leveraging free advice helps new entrepreneurs get started with minimal investment. Using these practical tips makes achieving profitability more attainable.