As small business looking to get cheaper prices on your olive oil, it’s smart begin purchasing in bulk. You can save quite a bit of money by switching to larger packaging, getting your oil packed on a pallet and ordering from a large supplier.
What most suppliers don’t tell you is that the transition from wholesale orders to bulk orders brings it’s own intrinsic issues. You have to closely consider these, if you’re really looking out for the overall welfare of your small business.
Here are the top three issues that we’ve found working with small businesses around the US.
1. Bulk purchases tie up too much capitol at one time, for only one ingredient.
When you buy in bulk, you are buying by the pallet. This is normally 220-300 gallons at one time, which can be a huge increase from what you may be buying now. Because olive oil is not a cheap product to begin with, normally one pallet costs $2,000-$6,000, depending on the grade that you choose. Can you spend this much on your ingredients, especially if you will be using this inventory slowly over 6 months?
2. There isn’t enough storage space, with the right storage conditions.
If you’re looking to buy a pallet of bulk olive oil, you have to know where you’re going to store this inventory. A pallet is typically 48” x 48”, so you have to have at least that amount of space available. Also, keep in mind that olive oil should be kept somewhere cool and dark. Do you have enough storage space?
3. Drums and totes are easier to use in a warehouse.
Because they weigh 500+ lbs and 2,000+ lbs respectively, they normally require a forklift or pallet jack to move them around. If you run your business out of your home, these bulk sizes are not the easiest to maneuver. Will you be able to move the olive oil around? Will you have to go up or down any stairs to put it into it’s storage space?
Consider each of these issues closely before transitioning your small business from wholesale to bulk olive oil purchases.
Topics: Small Businesses Advice
