Aggressive, nimble, and growing

Why an international marketer of headsets cares about costs

The advantages of running an aggressively growing business can be enviable. The company is nimble and able to respond rapidly to changing market conditions. It attracts top- notch employees who work hard and play hard. Plus, of course, there’s the steadily increasing revenue stream.

It might not seem that a company fitting this profile would be concerned with reducing costs. But consider what it means if expenses track growth. Along with revenue, costs could increase each year by 10%, 50% or even 100% or more. Wouldn’t it make sense to reduce these spends to save money now and save even more money in the future?

This approach made sense to two related international online and direct marketers of telephone headsets and more than 800 other telephony products.

By working with Expense Reduction Analysts (ERA), these rapidly growing companies reduced costs related to office products, merchant card processing fees and temporary employee fees. In addition, ERA uncovered a credit on office equipment leases and reduced related costs.

With the expected growth of the companies within the U.S., the savings implemented by ERA consultants can only grow.

The Credit Department is the largest user of temporary workers in one of the companies while the majority of temps are used by Human Resources and IT/Operations at the other. Between them, they used several different suppliers with mark-up rates ranging from 50% to 70%.

ERA recommended and implemented the consolidation of suppliers into a new primary vendor and an incumbent secondary supplier. The primary staffing agency provides strong candidates for temporary assignments as well as for direct-hire services. Mark-up rates are now lower than what the two client companies had been paying, plus temp employees can be converted to permanent employment after several months with no penalty.

ERA experts were particularly proud of the savings they found in office consumables. One of the client companies goes out to bid yearly and had negotiated the best prices consultants had ever seen. Nonetheless, ERA found additional savings with the incumbent and also negotiated price caps that will protect the client if market prices rise.

As online and direct marketers of headsets and other telephony products, credit card purchases are essential to the businesses. ERA's expertise in the highly complex area of merchant card processing fees yielded cost savings of 47%.

Consultants also have developed expertise in renegotiating the terms of complicated contracts for leasing and servicing printers and copiers.

Although one of the companies was in the middle of a five-year contract on more than 65 pieces of equipment, analysts were able to find savings of 10% a month with the incumbent supplier through a series of adjustments to rates, terms and conditions.

On other equipment leases, consultants negotiated a 29% reduction in costs and also found credits due of more than $22,500.



Your success story is waiting to be written. Get started lowering costs for your company.

Featured Case Studies