Most pitches for supplier consolidation are made in the language of partnership. This one is arithmetic. If you run facilities for a hotel group, a clinic, a school or a commercial tower, you already know the per-case price of hand soap and the per-roll price of paper towel. What often goes unpriced is everything that happens around those cases before and after they arrive on site.
The costs that never appear on the invoice
Running six suppliers for cleaning chemicals, paper, pantry consumables and small equipment means six of nearly everything administrative:
- Six purchase orders raised, approved and chased
- Six deliveries to receive, check against a docket and sign for
- Six invoices to match, code and pay, each with its own payment terms
- Six sets of product documentation to hold, and to produce on demand at audit
- Six points of contact when something is short-shipped or substituted
None of that shows up in a price comparison spreadsheet, because a price comparison spreadsheet compares prices. It is real work, though, and somebody on your payroll is doing it.
Do the arithmetic with your own numbers
We are not going to quote you an industry figure for the cost of processing an invoice, because the honest answer is that it varies enormously by organisation and most published figures are marketing. Use your own instead.
Take the fully loaded hourly cost of the person who raises your purchase orders and reconciles your deliveries. Estimate the time they spend per supplier per month across ordering, receiving, invoice matching and chasing discrepancies. Multiply. Then compare the total for six suppliers against the total for one.
Do the same for your storekeeper’s receiving time, and for the finance hours spent on payment runs. The number you get will be specific to you, and it will be defensible in a way that a figure from a vendor’s blog post never is. In our experience the administrative saving is usually the part of the business case that survives scrutiny, while the headline unit-price saving is the part that gets negotiated away.
Where the documentation burden actually bites
The moment consolidation earns its keep most visibly is an audit. A facilities operator supplying a healthcare or hospitality client is expected to produce safety data sheets for every chemical on site, current and matched to the product actually in the store.
With six suppliers, that means six document trails, six contacts to email, and a real chance that at least one sheet is out of date or was never collected. With one account, it is one request. We hold documentation on every chemical line we supply and send it with the account rather than on request, precisely because chasing it later is the failure point.
Where consolidation does not help
It would be dishonest to present this as free. Consolidation has genuine trade-offs, and you should price them:
- Concentration risk. One supplier failing is one supplier failing across your whole basket. Ask how stock is held and what happens on a shortage before you move everything.
- Specialist lines. If you use a specific machine consumable or a niche chemical, a generalist may not beat a specialist on price or availability. Keep those separate.
- Negotiating position. Multiple suppliers give you live comparison. Consolidating means you need a price list you can review on a fixed cycle instead.
A supplier who tells you consolidation is all upside is selling. The sensible move is usually to consolidate the high-volume, low-differentiation part of the basket first, keep specialist lines where they are, and review after a quarter with real data.
What to ask before you consolidate
- Can you supply every category on my list, or will you broker part of it?
- Is the price list fixed for a defined period, and how is it reviewed?
- What is the substitution policy when a brand is unavailable, and will I be told before delivery or after?
- Will I get one consolidated invoice, and is it a valid tax invoice?
- Who is my named contact, and what happens when they are away?
That last pair matters more than most buyers expect. A supplier who cannot issue a reclaimable tax invoice creates a problem that no unit price fixes, and a supplier without a named contact turns every shortage into a switchboard exercise.
Veltrix supplies hygiene, paper, foodstuff and electronics to facilities operators across the UAE from stock held in Ajman, on one account with one invoice, and we are registered for VAT with our tax registration number on every invoice we issue.
Talk to us about your list
If you want to see how your current basket would price and deliver as a single account, send us the list. We will come back with a written quote, the documentation that goes with each line, and the delivery window we can commit to for your emirate. No obligation, and no pressure to move everything at once.
Request a quote or call +971 52 356 1180.