Welcome

Imagine having just one source for 35,000 items, including office supplies, furniture, janitorial/sanitation supplies, presentation supplies and computer consumables. Imagine the time, effort and money you could save with less paperwork, fewer orders and fewer shipments. Imagine how satisfied your customers would be with fully complete, precisely filled and promptly delivered orders. Imagine the support, service, resources and experience of the industry leader on-call for your business. Imagine how all of this could free you to spend your time building your business, instead of just running it.

FDC Single Source is a revolutionary distribution system that can bring you more products with less effort and less cost.

Research has shown that the expenses associated with ordering merchandise can account for as much as 50% of the cost of goods. It only makes sense that when you eliminate multiple vendors, you cut costs. So, FDC Single Source was created to bring you the broadest possible selection of products from just one convenient, trusted and reliable source.

By consolidating your orders with FDC Single Source, you will only have to deal with:

· One purchase order

· One invoice

· One payment

Here are some additional single-sourcing cost savings statistics to consider:

"The process of ordering costs between $50 and $150 every time an order is placed."

Sales & Marketing Management, June 1998

"The typical purchasing pro devotes about one-third of his or her time to processing paperwork."

Purchasing, July 15, 1999

"It costs $455 to operate the purchasing department per active supplier."

CAPS Research, 1999

In many purchasing departments, soft costs exceed "hard costs" - the actual price of a product being bought. "If you've got a dollar item, you may be spending a buck-fifty just to acquire it."

The Business Journal-Milwaukee, Oct 31, 1997

"The average company will save 18 to 45 percent through quicker ordering, speedier delivery, fewer errors, and better information."

Forrester Research

Transaction costs alone can be enormous. "Using 200 suppliers a week means receiving 200 bills a week. Looking at this category of spending, purchasing finds significant savings from consolidating suppliers."

Purchasing, June 20, 1996

"The expense of operating the purchase function was 20/1000 of a cent per dollar of sales. Additionally, it costs 47/100 of a cent to purchase a dollar of goods and services."

CAPS Research, 1999

Let’s put this single-source concept into an example cost-savings scenario.

Suppose you use ten different suppliers for your office products and computer consumables purchases. And, suppose you place one order with each of these suppliers every week:

· 10 suppliers x 52 orders per year.

· Results in 520 orders.

· At a minimum cost of $70 per order.

· Results in total soft costs of $36,400!

How does FDC Single Source help?

· 1 supplier x 52 weeks x 2 orders per week.

· Results in 104 orders.

· At a minimum cost of $70 per order.

· Results in total soft costs of $7,280.

· For a total soft cost savings of $29,120!

THE TRUE COST OF BUYING PRODUCTS

Cost-efficiency analysts say that all of the following steps can be involved when purchasing products in the business environment:

· Issuing a requisition

· Researching catalogs, sales literature and price lists

· Getting price quotes

· Creating a purchase order

· Placing orders via phone, fax, mail, or e-mail

· Receiving the merchandise

· Delivering the merchandise to the right department

· Checking the packing list against the purchase order

· Paying the invoice

· Charging costs back to requisitioners

· Reconciling the bank statement

The steps above are sometimes referred to as the “soft costs”, or “hidden costs” of purchasing. Although they vary widely by organization, one thing is clear – purchasing is very labor intensive. In fact, when you look at the overall costs of purchasing business products – especially the everyday, consumable supply items – the labor costs of purchasing are typically far greater than the cost of the products themselves!

THE COST OF MULTIPLE SUPPLIERS. According to studies by the Business Products Industry Association, it cost companies an average of $45.00 just to cut a purchase order, and $25.00 to cut a check. That’s $70.00 cost per order, even without factoring in the time spent placing, receiving, and distributing the order.

These purchasing costs become very important when placing many small volume orders, or buying products from several different vendors. For example, suppose you were going to buy these types of products from five different suppliers, each at the best quoted price:

· General office supplies

· Computer supplies

· Copier supplies/toner

· Janitorial supplies

· Lunchroom supplies/coffee

Assume in this example that each of these orders is for $100.00, making your total product cost $500.00. But now find the true cost of placing five separate orders by adding $70.00 an order for cutting five purchase orders and five checks. And for this exercise, add in another $30.00 an order (which may be a conservative figure) for other labor costs such as getting price quotes, receiving and distributing the merchandise. That’s an additional $500.00, for a total purchasing cost of $1000.00!

“SINGLE SOURCING” COST REDUCTION. Now look at the possibility of buying all these products from a single source instead of five different sources. And assume that you pay a competitive price for the merchandise, but not necessarily the best quoted price on every item. Say your overall product costs $575.00. But with only one supplier, you have only one set of transaction cost, then, would be only $675.00 versus $1000.00 buying from multiple suppliers. You’ve saved money even though you’ve actually paid more for the products! This exercise is often overlooked because labor and other types of overhead costs are harder to calculate than looking at a cash register receipt or a product price list. However, even a summary analysis will often reveal that buying products by looking at the best available price may indeed be “penny wise, pound foolish.”