If you are a small business looking to get cheaper prices on your olive oil, it’s smart to begin purchasing bulk quantities. You can save a lot of money by switching to larger packaging, getting your oil packed onto a pallet and ordering from a bulk supplier.
What most suppliers don't always tell you is that the transition from wholesale orders (buying one or two cases at a time) to bulk orders (buying a full pallet) brings its own intrinsic issues. You have to consider closely if the switch you’re looking to make, while helping you save money, may be too tough to handle in other ways.
Here are the three issues that we have found working with small businesses around the US.
1. Drums and Totes Are Meant For Use In A Warehouse
Because drums weigh 500+ lbs. and 2,000+ lbs. respectively, they normally require you to have a forklift or a pallet jack to move them around. If you run your business out of your home, these bulk sizes are NOT something we would suggest you purchase. It will be way too much of a hassle — or completely impossible — to maneuver. Drums and totes are ideal for industrial settings only.
2. There Isn't Enough Storage Space, With The Right Storage Conditions
If you are looking to buy a pallet of olive oil, you have to know where you will be storing the inventory. A pallet is typically 48"x48”x52"H so you have to have at least that amount of space available or more.
Also, keep in mind that olive oil should be kept somewhere cool and dark. You’ll want to keep it somewhere dry as well, if you have any cardboard packaging involved (like the 35 Lb. Containers or 6x1 Gallon Cases).
3. Bulk Purchases Tie Up Too Much Capital At On Time, For Only One Ingredient
When buying 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 currently. Because olive oil is not a cheap product to begin with you will be looking the cost of one pallet being around $2,000-$6,000, depending on the grade that you choose. Can you spend this much on only one of your ingredients, especially if you will be using this inventory slowly?
Consider each of these issues closely before transitioning your small business from wholesale to bulk olive oil purchases.
Topics: Food Manufacturing, Packaging, Quality Control, Small Businesses Advice