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Bulk Purchase versus Small Frequent Purchase

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  • #31
    Re: Bulk Purchase versus Small Frequent Purchase

    The main issue with bulk purchase is that we don't have the storage space for all the products and many of them can expire if we buy too much. So nothing like having a reliable supplier that allow us to buy with a decent frequency and good margins. Having too much product is never good as we have our money stalled there.

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    • #32
      Re: Bulk Purchase versus Small Frequent Purchase

      I deal in cctv surveillance equipment and I always purchase in bulk. The key is to have a trusted supplier that you have been in business with for a while. For my business, bulk purchases have been the right choice.

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      • #33
        Re: Bulk Purchase versus Small Frequent Purchase

        Bulk purchase has always proven to be the better deal as a whole. One saves a lot more money and has plenty more in supply for emergencies and for the long scheme of things. If an item is ever immediately out of stock, it may be replaced right away. This is a blessing in disguise. Not many see it that way, but it is no less true.

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        • #34
          Re: Bulk Purchase versus Small Frequent Purchase

          My experience with retail business tells me that the smaller the capital, so is the purchase. The volume of purchase depends on the cash flow of the company. There are companies that get a loan to finance their purchases especially if they are importing. It is impractical to buy in small quantities from abroad.

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          • #35
            Re: Bulk Purchase versus Small Frequent Purchase

            Originally posted by Alexandoy View Post
            My experience with retail business tells me that the smaller the capital, so is the purchase. The volume of purchase depends on the cash flow of the company. There are companies that get a loan to finance their purchases especially if they are importing. It is impractical to buy in small quantities from abroad.
            It's a good point right here, if we don't have much capital, we should not spend it on unsold inventory. At the same time, buying more inventory in some cases can bring down the price of the product, so it's a struggle most companies have.

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            • #36
              Re: Bulk Purchase versus Small Frequent Purchase

              Surely you can save a lot with bulk purchases and it is really good for a business or even for supplies at home. As long as the business can afford buying bulk products that have long shelf life, it's all good then. But for me, when I started a small coffee shop, I did not have the funds to buy products in big bilks but I do purchase them in sacks or boxes depending on the product. And I do not buy a lot of products that have short shelf life.

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              • #37
                Re: Bulk Purchase versus Small Frequent Purchase

                The main issue with bulk is storage and the money just sitting there in the form of inventory...

                Smaller purchases do make the price go higher usually, so finding the balance that suits our business better is usually the key to a successful business instead of closing doors. We need to have a good eye for these "details".

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                • #38
                  Re: Bulk Purchase versus Small Frequent Purchase

                  I think that it makes sense what gracer was saying above, in that when you first start you probably assume that the bulk buys are what is going to save you, but you really have to see what you use and how you use it.

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                  • #39
                    Re: Bulk Purchase versus Small Frequent Purchase

                    Bulk shopping can boost our business if we have orders, but if we don't, why are we buying bulk for, what's the point? We are better off purchasing according to our needs, even if that increases the price per unit. When the business consolidates we can start buying bigger quantities.

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                    • #40
                      Re: Bulk Purchase versus Small Frequent Purchase

                      Hi, will bulk sms really helpful to generate leads? pls suggest

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                      • #41
                        Re: Bulk Purchase versus Small Frequent Purchase

                        "The more you buy, the more you save!" I hate this kind of marketing spin. It draws us in because, after all, who doesn't like to save money?

                        But it conveniently focuses on only one part of the picture. A sale might entice you to buy three shirts for $30 rather than at $12 each. Obviously, a $10 shirt is cheaper than a $12 shirt. But they've gotten 18 more of your dollars. Did you really go out intending to buy three shirts? The commercial should say, "The more you buy, the more you spend."

                        HP Laptop Repair in Bangalore

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                        • #42
                          Re: Bulk Purchase versus Small Frequent Purchase

                          The bulk purchase may worth it or not depending on the demand needed. A supermarket selling thousands of powdered milk cans or a Heavy steel industry requiring a steady supply of mineral iron each day would buy these items in bulk from its supplier since the % discount really reduce the amount of investment compared to buying the retail default price. Now, a hardware store selling only a few PC builds only needs to do small frequent purchase to satisfy its demand, buying in bulk is more expensive in the long run.
                          Synchronzed Supply Systems Ltd

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                          • #43
                            Re: Bulk Purchase versus Small Frequent Purchase

                            I would think that there is no 1 strategy solution for every business model, the choice between bulk purchase and small quantity purchases would need to depend some of the following circumstances;
                            * Product Life Cycle – It would not be wise to commit bulk purchase when a product is reaching the end of its product life cycle. Some products have a long life cycle (i.e. Natural resources and Industrial products), Bill of Material for such products could be bought via bulk purchases. Most consumer products have a limited product life cycle, and it may not be viable to practice bulk purchase at it’s late stage of it’s product life cycle.
                            * Sales Forecast – Bulk purchase could be optimised in conjunction with a realistic and optimistic sales forecast.
                            * Financial Perspective - Bulk purchase should be assessed from the financial perspective as well (I.e. cost efficiency or financial gains vs risk). Bulk purchase could come with inventory holding cost over a period of time. The cost of inventory holding (i.e. Opportunity interest cost of capital investment and cost of storage and handling cost) should not outweigh the benefits of bulk purchase (i.e. Discounts). Many Supply Chain practitioners overlook the impact from the financial perspective and may potentially cost the company more over a long term period.
                            * Perishable products – The risk of bulk purchase is higher in the case of perishable products or limited shelf life products.
                            * Trendy products – Trendy products such as fashionable clothing, mobile phone casing, footwear designs and car designs have a limited life cycle. It would be wise to practice caution when it comes to bulk purchase.
                            * Newly launched products – The risks of failure are higher with newly launched products, as such, it would be wise to practice caution when it comes to bulk purchase.

                            An alternative to bulk purchase would be to commit an annual volume without taking the bulk delivery at one point in time. In this case, we will be able to exercise the choice of delivery timing. These instances would be applicable to perishable products and heavy financial commitments.

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                            • #44
                              Re: Bulk Purchase versus Small Frequent Purchase

                              I am also with bulk purchase. I will purchase things in bulk as long as it is easy to store and expiry date is not anon. I see many benefits in bulk purchase, for example:
                              You get discounts on bulk purchase.
                              For the bulk purchase, unit price is also cheap.
                              You save time by not having to go to store to buy supplies again and again.
                              You save money on shipment.

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                              • #45
                                Re: Bulk Purchase versus Small Frequent Purchase

                                There was story today on the news about a company that is having issues with storage in the heat and it turns out it was mostly due to overbuying at a good price. Just goes to show you there can be too much of a good thing I guess.

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