Money Saving Tips for Manufacturers

For business owners and managers in the manufacturing sector, the problem of cutting expenses

and saving money is a consideration that can never stray far from their mind. In order to succeed,

it’s absolutely vital to figure out how to minimize burdensome operating costs—or else the

company may not be around for long. Business expenses come in numerous varieties, from

production expenditures to marketing costs, which means that there are many kinds of cost-

cutting strategies that one could pursue. If a business can’t squeeze any more waste out of their

production process, then they might be able to slash the expenses associated with warehouse

storage, for example. Having said that, we’ll explore some handy tips that manufacturers could

use to save cash.

Negotiate Discounts with Vendors and Suppliers

Make no mistake: Supply chain companies want your business. This means that it’s often

possible, within reason, to secure discounts from them. Keep in mind that discounts can come in

many different forms—it’s not necessarily about getting a lower price on a particular product.

You can also ask for free or reduced-rate services, such as shipping.

Rent Your Extra Warehouse Space to Suppliers

Empty warehouse space represents property that isn’t being put to optimal use. Many warehouse

managers, however, aren’t sure how to solve that particular problem. Here’s one solution: rent

out that extra space to your suppliers. If your supplier doesn’t have an existing warehouse in the

region, this can be a very attractive proposition. In return for this service, you should be able to

negotiate additional discounts on their goods.

Remove Superfluous Features from Products

No matter what kinds of materials you produce, whether screwdrivers or microwave ovens, you

need to ensure that you don’t waste time and money on features that simply aren’t needed. If it

doesn’t do anything important, and your customers could easily do without it, then you could

simplify your production methods by eliminating it altogether. Doing some market research to

gain a deeper understanding of customer preferences can reap dividends for your company.

Solve Problems Before Going to Court

Fees and expenses associated with court trial and arbitration can be considerable. Your best

strategy is to avoid being dragged into these legally binding dispute resolution processes

whenever possible. This means that any controversies with vendors, suppliers, or any other

relevant entity should be dealt with as soon as possible. If you receive a formal complaint from a

vendor, don’t simply dismiss it—you stand your best chance of dodging serious problems down

the road if you can bring matters to an early, mutually acceptable resolution.

Hire Independent Contractors

You can reduce costs significantly by hiring personnel who do not incur payroll taxes and other

expenses associated with normal salaried employees, but it’s very important to tread carefully

here, as the IRS has strict rules in place regarding the proper use of independent contractors. For

many kinds of positions, this will not be a legally permissible option for you.

Rent Uniforms

Many business owners in the industrial sector have found that renting uniforms for personnel

confers a variety of benefits. In fact, a survey conducted in 2015 by the opinion research and

consulting firm Fabrizio Ward (PDF) discovered that no less than 80% of industrial decision-

makers agree with the statement “Renting uniforms saves companies time and money, and

improves the appearance of employees.”