Paper Cuts: Buying in Bulk for your Business
Today might officially be "April Fool's Day", but I swear that when you have your own business, every day feels a little like "fool's day". At least once a day I find myself whispering, "wait, is this for real? Is this really happening?" - from perfect match clients and dream editorial features, to printing mistakes and insanely rushed deadlines. I'm constantly giggling at the day-to-day happenings around here at Sincerely, Jackie. And I mean that in the best way possible.
One of the things that fooled me pretty big when I started my business was the concept of buying in bulk. In fact, it has continued to fool me through the years.
As a society, we are all tricked into thinking that it's worth it to buy everything in bulk. In some cases this is true - I buy a lot of household items in bulk and they do not go to waste. But when it comes to business, I've learned that buying in bulk is rarely a financially sound decision. Today for Paper Cuts, I want to share the top reasons why I no longer buy in bulk, and why. I'll also share the few things that I DO buy in bulk. (note, I will be picking on clear stationery boxes for this post, but if you use them and love them, GREAT! For me they represent one of my earliest bulk-buying lessons).
WHY NOT TO BUY EVERYTHING IN BULK:
1- YOU DON'T REALLY NEED 500 CLEAR BOXES (or shipping boxes, or brochures, or whatever it is you want to buy a million of). I started my stationery business over 6 years ago and one of the first things I did was buy 500 5x7 clear stationery boxes. The cost per box was deceptively low, and I justified my purchase by telling myself that I needed them in order to professionally package orders. My purchase, in theory, made sense; I needed packaging for my items. But what I discovered was that the clear boxes created static, which meant little bits of Miss Juliet fuzz were sticking to the boxes, as well as dust, finger prints, and anything other tiny particle in the air. ANNOYING. The boxes also turned out to be too shallow, easily warped, and were a pain to work with for each order. After two years, I ended up tossing close to 300 of the boxes because I hated them so much. LESSON LEARNED: This is just one example of me buying something in bulk before I really knew enough about how I planned to use them, and their true practicality. Now, I always pay the premium to order a minimum quantity of something so that I can try it out before investing in huge quantities. I also try to project how many of an item I will need in a year, so that I don't end up with more of an item than I'll ever need.
2- YOUR BUSINESS MAY EVOLVE FASTER THAN YOU CAN USE THE 500 CLEAR BOXES(or 20 rolls of chevron washi tape, 50 spools of colored ribbon, or whatever it is you are about to buy a million of). As my business grew, I wanted my brand to grow with it. I realized I wanted to invest in my packaging, but I felt guilty spending more money on new boxes when I still had 400 of the miserable clear ones to use. LESSON LEARNED: Wait until you have a really solid understanding of your brand and packaging needs. Then order the minimum quantity to test things out and see if you really want to buy XYZ item in bulk.
3- THE XYZ BULK THING MAY END UP COSTING MORE THAN THE PER ITEM PRICE. I learned this lesson last year when I ordered a ton of mugs to send to vendors as gifts. The mugs themselves were fairly affordable, but the cost for shipping each mug was INSANE. The per item price more than quadrupled, which meant I really could not afford to send the mugs as gifts and needed to go out and buy a whole new set of gifts that were more affordable. But it wasn't really more affordable, because I had already purchased a ton of mugs. (side note, the mugs ended up selling out in the Etsy shop, and I ordered a second batch, which are still available). LESSON LEARNED: Do a little more research around all of the costs involved for each item. A $4.00 art print may end up actually costing $16.00 per print once you add all the packaging, shipping, marketing, etc costs into the equation.
BIGGEST LESSON LEARNED:Before buying in bulk try to REALLY understand how you'll use the item, how many or the item you realistically need, and if there are added hidden costs. I would also suggest always buying the minimum of an item so you can test it out before investing in a huge number of them.
There certainly are things that I buy in bulk and get a ton of use out of. Office supplies are the biggest bulk category for me: blank shipping labels, bubble envelopes, tissue paper, tape, printer ink, computer paper, pens, pencils, and so forth.
Are there any other things that you buy in bulk and love or hate?
Wednesdays here on the blog are all about sharing Paper Cuts, which is a behind-the-scenes, down to Earth business advice series. I hope you've enjoyed today's Paper Cuts topic, and look forward to having you back next time! To read past Paper Cut posts, click here.