- Switch to a larger packaging size. For every next packaging size you switch up to, you save between $0.02-0.05 /lb.
- Ask your supplier where their volume price breaks happen, and consolidate your orders to meet those volumes. You can save anywhere between $0.02-0.10 /lb by doing this.
- Order more than one pallet at a time to cut down on shipping costs. The more pallets you ship at one time, the more you save.
- Consider switching to the 330 gallon Bag in Box Totes. The larger size not only lets you save money over the drums on the oil itself, but you’ll also save up to 33% on shipping. Read the case study.
- If you use more than 250,000 lbs of each oil grade per year, do a full analysis to see how much you could save by switching to in-house storage tanks with deliveries in flexis. Making the switch from totes to flexitanks saves about $0.10 /Lb. on average on just the oil. It also removes ALL pallet shipping costs (saving an average of $6,000 per container, or $0.14 /lb).
- Even if you don’t want to set up an in-house storage tank, you can coordinate your bulk tanker or flexitank deliveries to deliver in large re-usable totes that are stored at your facility. Read the case study.
- Lock in a contract at an ideal time to avoid potential increases in future costs.
- Consider your supplier as a business partner, and ask them for advice often. They should have a few ideas that you could put into place immediately to save money.
- Do not think that you always need to reduce the quality of the oil that you get to save money. Though this is one option to reduce your ingredient costs, there are other logistical ways you can save money through strategic packaging, shipping, and delivery that won’t affect your final product.
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What else do you do to help lower your bulk oil costs? We want to know. Tell us in the comments section below.
Topics: Food Manufacturing
