Wholesale Clubs Help Small Businesses Cut Costs

Convenience stores, restaurants, small businesses, daycare centers, and home businesses can cut costs by purchasing from wholesale clubs.

Cash flow and cost containment are concerns for all businesses, but they can be particularly challenging to the nation’s smallest companies. Convenience stores, restaurants, daycare centers, cleaning services and small offices usually don’t have the storage space or the cash to buy inventory, food or supplies in the large quantities that traditionally have been needed to get trade discounts.

Fortunately, though, small size and limited cash doesn’t mean that these very small businesses have to pay top dollar for their purchases. Many small business owners are discovering they can save significant amounts of money by purchasing food, beverages, paper goods, office supplies, cleaning products, automotive products, and other goods at member wholesale clubs.

To learn more about the way wholesale clubs help small businesses Business Know-How recently toured the Sam’s Club facility in Secaucus, New Jersey and spoke with Catherine Corley, Vice President, Small Business Insights and Frank Castrada, Grocery Manager for the Secaucus Club.

“Cost savings is the number one reason small businesses shop with us,” says Catherine Corley, Vice President of Member Insights for Business Reseller segment and Food Service Entrepreneur segment. “Small business owners don’t have the scale to negotiate purchasing, so we use our scale to negotiate purchases on their behalf. We keep our costs low and pass savings along to members.”

Those cost savings can be quite substantial, for some businesses. One of the services Sam’s Club provides for their small business customers is a free price comparison analysis. In the first half of 2009, Sam’s Club representatives did price comparisons for more than 100,000 small business owners and identified more than $270 million in cost savings that could be realized by making the same purchase from Sam’s Club. In one comparison, for instance, a barbeque restaurant owner discovered he could save $12,000 a year just on drinking straws by purchasing them from Sam’s Club instead of the supplier he was using. The comparison identified other savings the restaurant owner could make as well.

The price of meats, produce, and other food items are also attractive to restaurants and fast food establishments.

“I buy all my lamb, pork, and salmon at Sam’s Club,” says PierreJean Laupies, . “The meats come from all the best sources, but are considerably less expensive than other suppliers.” Laupies is Chef and General Manager for Chez Daniel Bistro, which is the food service operation for the Embassy Suites Hotel in Bloomington. PierreJean buys all his office supplies like computer ink and paper, tape, and envelopes at the Club, too. He figures he is saving at least $1,500 every month by shopping at Sam’s Club. And the rebate from using his Discover Card brings in added savings.

Businesses don’t have to buy huge quantities of goods to enjoy savings, either. “In this economy, we’re seeing businesses coming in more often and replenishing their inventory or supplies on an as-needed basis,” explains Catherine Corley. “We are your warehouse around the corner. You don’t need to carry inventory or tie up your cash. We’re here 7 days a week.”

Office supplies, cleaning supplies, paper goods and snacks and other foods packaged for resale are among the biggest sellers along with meats and produce. But Sam’s Clubs also stocks a wide variety of other items – everything from open-for-business signs to mattresses (for hotel owners), industrial-strength shelving, light bulbs, and even an old-fashioned popcorn machine.

In addition to cost savings, Sam’s Club offers its business members a number of other benefits. Because business owners are always short of time, Sam’s club opens at 7 am for its business customers. It also offers a “Click and Pull” and “Fax and Pull” advance ordering service. Orders that are placed online or by fax by 5 PM are picked out of stock Sam’s Club employees and are ready for the customer to pick up the next day. Customers can also order many items online and have them shipped to their location. Other benefits include online resource centers that suggest ways businesses can increase profits; cost comparisons and a new “eValues” program that gives Business Plus members customized, digital values and makes them automatically available at checkout.

Sam’s Club is a membership wholesale club. A basic business membership is $35 and a family membership costs $40. Businesses who opt for their Business Plus membership at $100 and who apply for and qualify for a Sam’s Club Discover Credit card benefit from a 2% cash back rewards program. Those rewards along with the savings on everyday purchases allowed one Secaucus, NJ member to buy a truck for his business.

Businesses can apply for membership online or at their local Sam’s Club.

About the author
Janet Attard is the founder of the award-winning  Business Know-How small business web site and information resource. Janet is also the author of The Home Office And Small Business Answer Book and of Business Know-How: An Operational Guide For Home-Based and Micro-Sized Businesses with Limited Budgets.  Follow Janet on Twitter at http://www.twitter.com/JanetAttard.