Among the factors that can make or break your business, financial management is right near the top. But in addition to monitoring the big-picture items on your financial checklist, you've also got to keep a close eye on the smaller expenditures that might sometimes seem like chump change to you.
These days, customers are savvy shoppers, often pinching pennies and always looking for deals. You should look to them for inspiration when you need to purchase the products that keep your own business running smoothly.
One smart way to do that might be to join a members-only warehouse store like Costco, Sam's Club or BJ's Wholesale Club. Each store charges a basic membership fee (Costco charges $55 a year; Sam's Club, $45; B.J.'s, $50), or you can choose a higher level of membership where you pay a higher annual fee but also save more on purchases. Customers obviously feel the membership fees are worth it—according to market analysis firm First Research, warehouse clubs are a $410 billion industry.
With the ability to save money on so many different products, it makes sense that many business owners would be regular shoppers at warehouse clubs. Lisa Hennessy, for instance, who owns Your Pet Chef LLC., a pet chef service in Chicago, frequently shops at her local Costco to purchase Ziploc bags, parchment paper and tin foil to use in her business. Hennessy and her employees prepare specialized meals for their doggie client base and use the Ziploc quart-size freezer bags, parchment paper and foil to help them prepare and store the food they make for their four-legged customers.
If Hennessy ran a multimillion-dollar company, she might consider ordering her products from a wholesale supplier, she says, but in her case, it's more effective to buy them in bulk at a warehouse club than to go through a supplier—and it's definitely far cheaper.
"I save between $50 and $75 per trip," Hennessy says. "When an item is on special, the amount I save can easily double."
If you're a newbie to the world of warehouse shopping—or even a regular who's looking for some savings tips—here are money-saving tips from some of your peers.
Look for Deals on Top of the Steals
You can save a lot at warehouse clubs just by wandering the aisles and filling your cart with the things you need (you can also spend an obscene amount of money, so be careful), but many of the stores also offer coupons and sales on top of their standard low prices. Whenever she sees the products she normally buys on special, Hennessy says, "I feel like I won the lottery."
Business owner Tina Nelson has one word of advice when trying to use coupons at warehouse clubs. "Some employees automatically input the sale price [that's listed] in the coupon book," she notes. "Others do not." It pays to keep your eye on the prices that get rung up, particularly if the item's on special.
Nelson is an attorney who founded Professional Games Inc., a Lakeville, Connecticut, company that manufactures and sells the board game Lawsuit. Nelson says she regularly shops at warehouse clubs for "anything and everything" she needs to run her law office and her business, including shipping tape dispensers and tape, address labels, pens, flash drives, scanners and computers, plus almost any kind of office supply you can imagine.
Visiting a warehouse club can be a little like going to a flea market. Unlike a typical grocery or department store that generally sells the same merchandise on the same shelves day after day, month after month, and even year after year, that's not the case with many warehouses, which routinely change brands or shift products to another part of the store. While a lot of consumers enjoy the treasure-hunting aspect of warehouse shopping, as a business owner, you may not be as enamored.
"We own a bed and breakfast inn and [shop at] Costco for a lot of things, like eggs, butter, bottled water and paper goods, just to name a few," says Larry Willis, who with his wife, Pam, owns The Gables Wine Country Inn in Santa Rosa, California. But, Willis says, "The practice of moving merchandise around can make the shopping experience tedious. Our time is valuable, and having to play hide-and-seek for a bag of Craisins is frustrating."
Shop for Bargains for Business Meetings
Lauri Flaquer runs St. Paul, Minnesota-based Saltar Solutions, a homebased consulting business with international clients. "I host retreats for clients in my office," Flaquer says. "They travel in for five days, and we work together developing their brand, marketing strategy and social media platform, and we end with a TV appearance. There's a hotel less than a mile from my office that they all stay at."
But Flaquer has to feed her clients during the five days they're with her, so she shops at a nearby Sam's Club to pick up the things she needs. Frequent purchases include fresh fruit and vegetables, cheese, trail mix, tortillas, salmon, chicken—almost everything a hungry client could need.
Flaquer estimates her food costs at least 25 percent less than if she were shopping at a regular grocery store. But her clients can never tell she's serving bargain-priced food: "With all the money I save buying bulk," Flaquer says, "I can afford the expensive dishes and linens that set the higher standard my clients are paying for."
There Are Warehouse Clubs Without Membership Fees
Sure, the popular warehouse chains have a membership fee, but Claudia Mora has found one that doesn't. Mora, who owns a full-service beauty salon in Fairview, New Jersey, called The Beauty Vault, says she has a membership card to Restaurant Depot, which, provided you qualify for membership, doesn't have a membership fee.
It's come in very handy, Mora says, "[because] the amount of toilet paper, paper towels, coffee and water we go through is ridiculous."
Have Your Purchases Delivered to Your Door
Aron Susman, co-founder of TheSquareFoot, which helps people search for office, retail and industrial space for lease, says he buys in bulk—but not from a warehouse store. Instead he shops on Amazon.com, paying the yearly $99 Amazon Prime membership fee, which includes free, two-day shipping.
"What do we buy? Toilet paper, paper towels, notebooks, office supplies, candy—you name it," Susman says. "It's so much cheaper to buy in bulk, and it gets delivered right to our door. I don't understand why every business owner doesn't do this."
But before you ditch the brick-and-mortar warehouse clubs, find out whether your local stores deliver—some will ship some items for free. Haralee Weintrub, CEO of Haralee.com, a company that sells sleepwear for women going through menopause, says she buys computer paper for her invoices from Costco.com. "I have it delivered, which is free, then I don't have to try to lift the heavy box at the store and then into my car," she says. "It's easy, inexpensive and what I need."
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