Where is the Break-even on a Warehouse Club Trip?

Generally, the larger the company, the less likely it is to use a system of running to a warehouse club or other box store for supplies. We wondered, why?

In larger companies, it may be more likely someone has worked through the costs involved with a warehouse trip. The question is, for what cost savings an organization perceives, does that amount exceed the added costs of procurement? To find out, first we had to make an estimate of the cost of procurement.

From starting at your office, through driving, parking, walking the aisles, cart loading, waiting in line, loading products into a vehicle, driving back to the office and unloading into your building – we applied these estimates of what an average box store trip consumes:

                1 hour and 50 minutes (track your own time for a personalized calculation)
                10.5 miles one-way, or 21 miles round trip (again, enter your own actual distance)

According to the June 2012 National Bureau of Labor Statistics report, the average total cost of an employee (wages and benefits) is $28.80/hour. (Hopefully, you’re not making the run yourself which would add other dimensions such as lost opportunity into the calculation.) The same report tells us the average government employee wage and benefits total is $35.51/hour. For travel costs, we used the federal vehicle reimbursement guideline of $0.555 per mile.

The Resulting Cost of a Warehouse Trip

The cost in this illustration for 1.83 hours of time/labor would be $52.70 for a public sector employee and $65.00 for a government employee. Transportation costs for both examples would add another $11.65.

From there, we can calculate break-even. Let us say there was a perceived 7% advantage to making the trip to the warehouse. For the record, we have found that equivalent products purchased through a janitorial specialist are actually often the same or even lower than prices at a club. But for this illustration, where would the break-even point be if there was a 7% lower face cost on the products purchased?

Private company – Savings would not start accruing until after spending

$919.28

Public agency – Savings would not start accruing until after spending

$1095.00

Again, we find that janitorial supplier specialist services, like those of PUR-O-ZONE, are not more expensive than equivalent products from a club or big box. So bottom-line there would be no savings to going through all the steps and time involved with a warehouse trip, only added expense.

If you have to go to the warehouse store for some purchases anyway, if a janitorial specialty supplier with delivery services can cut out half your time spent in the box and handle interim deliveries, there is significant cost-cutting potential. And the person out gathering supplies is available for other work.

Here are some additional advantages of working with a specialist in paper, janitorial supplies and foodservice consumables:

                Wider selection of products

                Access to expert advice by phone, email and following by social media

                Training on-site and on-line 

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