From the outside, many people don’t fully understand the many layers of business technicians navigate. Apart from putting knowledge and education to work, you’re also working a numbers game with the parts and supplies you purchase and use daily. Protecting and growing your profit margins means making deliberate decisions to lower your costs while reasonably up-charging. Here’s 3 ways that you can do just that.
Protecting Your Margins
It’s not enough to simply stick with the same source for materials. As markets change, prices are affected, and everyone involved with materials are looking to protect their margins, including manufacturers. You can cushion yourself by constantly looking for better vendors to purchase your materials from. The price one company is able to offer might not completely stack up to another’s. Their margins—and costs—will be set according to how much they’re able or expecting to sell. Whenever you notice a change in the market prices, it’s probably a good time to re-evaluate your current vendor and consider what others can offer.
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Purchase Much-Used Items in Bulk
Purchasing in bulk will lower the overall cost of each individual item, so for items like cables, zip ties, tape, or brackets, it’s a great option. Bulk purchases will certainly increase your margin, but only if you’re using (and therefore charging clients for) those supplies. You might be happy finding a great deal on some materials,but if they’re just sitting around in your garage, you’re not seeing a return on that investment, even if it was a great deal. . Besides, some of those materials may end up living on the shelf after an upgrade is released and they become no longer relevant. Before making your purchases, consider your materials sales history and what supplies ate utilized more than others. This can shed some light on which materials you should stock up on, and which ones you might want to purchase on a smaller scale.
Partner with a Group Purchasing Program
It’s easy to achieve higher profit margins by acquiring cheaper materials, but too often this comes at the sacrifice of quality. Group purchasing programs offer technicians the ability to purchase higher quality materials at an even cheaper cost than some lower quality materials. When techs are able to use better materials, their work lasts longer, and they can therefore possibly charge more. . Better materials mean happier clients and bigger profits. It’s a win-win.