Today, businesses sometimes take advantage of economies of scale by purchasing items in bulk. Ordering in large quantities allows managers to streamline shipping costs. It often results in significantly discounted prices, too. Just consider five industries which prefer to order merchandise in high volumes:
One: The Promotional Products Industry
Businesses involved in wholesaling promotional products routinely order large quantities of goods from their suppliers. They thrive by re-selling these items in a customized form at a higher price to other companies for distribution to end consumers. For example, many of these firms charge additional fees when their own customers order less than a required minimum quantity. They add this charge because they need specified volumes in order to obtain a profit on the merchandise.
The enterprises engaging in the promotional products industry usually specialize in specific types of popular products: pens, mugs, logo wear, and calendars all generate considerable customer interest. Promotional product wholesalers market these items to distributors in bulk on a daily basis around the world.
Two: The Grocery Industry
Numerous grocery chains obtain benefits by ordering popular products in bulk quantities. Large retailers like Walmart, Amazon, and Costco use economies of scale to help their enterprises thrive. By placing large orders with wholesale supplies for some types of in-demand products, they obtain the ability to pass along attractive savings to shoppers.
Today, even many smaller, regional grocery store chains prefer to place high volume orders for some types of goods. Particularly if the merchant anticipates restocking the product rapidly, it may make sense to order some brands on a regular, recurring basis. This practice often allows grocery stores to earn a higher profit margin, enabling them to pass along attractive discounts to customers during sales.
Three: The Healthcare Industry
Healthcare providers have also discovered the importance of utilizing economies of scale whenever possible. Hospitals frequently face high operating costs. The ability to save money on volume purchases matters to many administrators.
For example, consider the attractive cost savings available when a medical center refurbishes its patient wards. Selecting hospital televisions from MDM Commercial in bulk offers attractive savings. Other bulk purchases sometimes include beds and wheelchairs.
Four: The Steel Manufacturing Industry
Companies which manufacture products from formed steel appreciate the importance of obtaining their supplies in bulk. They order metal billets, pipes, ingots, and other forms of steel in large quantities. The ability to maintain extensive raw materials on hand allows some manufacturers to churn out finished orders on a robust 24/7 schedule.
Since storing metal consumes space, enterprises with warehousing capabilities enjoy the greatest advantages in this highly competitive field. They gain the ability to purchase steel in high volumes during downturns in the market. Some firms offset the costs of placing large order by re-selling steel to smaller steel processing companies in turn.
Five: The Restaurant Industry
Typically, large restaurant chains maintain standardized menus for a reason. These companies often purchase supplies from vendors in high volumes. For example, by making bulk purchases of items such as paper plates and styrofoam cups, franchises assist their franchisees in enjoying a higher profit margin. The few cents they save on each transaction ultimately add up!
Companies with the capability to obtain discounted prices for high volume orders enjoy marketplace advantages. Most “mom and pop” small restaurant owners cannot negotiate similar price breaks successfully because they lack the ability to place large orders with vendors. These smaller enterprises sometimes focus upon crafting specialty gourmet food items, instead of seeking to compete in the low-price fast food marketplace.