LPS vs. Traditional Distributors
The LPS tagline is:
“A New Approach to Scientific Supply.”
What is that new approach?
How is it different from traditional distributors or resellers?
Why is the LPS approach an improvement over your current purchasing system?
Traditional: Manufacturer -> [one or multiple sub-distributors] -> Distributor -> Your lab
LPS: Manufacturer -> Your lab
Benefit: Achieves dramatic cost savings.
Traditional: You shop on your favorite distributors website. You determine what you want from within vendors product offering. Chat or customer service rep may provide assistance. You place your order online or send in a PDF purchase order.
LPS: You tell LPS what you are looking for and if you will accept alternatives. LPS searches across multiple vendors, and provides you with a range of options.
Benefit: LPS does all the legwork for you. LPS does this every day - we are sourcing pros! You pay nothing for this service; it is built in to the price of the item.
Traditional: The price you see on the website is the price you pay. If you aren’t spending hundreds of thousands of dollars each year with your distributor, you have little leverage. If you do get a discount, it’s a percentage off a highly inflated list price.
LPS: We price everything on a cost plus basis. We buy direct from the manufacturer whenever possible. We shop across multiple vendors who compete for your business daily. You may even use your UPS or FedEx account. When you do, we pass on free shipping when offered.
Benefit: Using the LPS pricing model, our clients see an average of 36% annual savings.
Traditional: If you are a very large customer, you get premium customer service. If you aren’t, you become one of thousands who call into a pool of customer service personnel, many of who are increasingly located in a foreign country.
LPS: We only have one level of service - premium. Because our number of clients is limited, we know you and you know us. No phone trees! You call, we answer.
Benefit: Speaking to the same person, day-after-day who knows what you buy, when you buy it and all that has happened before at your lab is like having another member on your team.
IT and Data
Traditional: Web ordering with a huge portfolio or products to choose from. Order history is available. Spend data is seldom offered (they suspect you will use it to give to the competition for comparison shopping.) Catalog numbers frequently change.
LPS: Web ordering via a catalog customized for each client. Order history is available. Spend data is always available and updated monthly. Catalog numbers never change.
Benefit:Ordering is as simple and easy as any website. Tracking spend by item by item category or by any other method using a download to spreadsheet is simple and easy.
Traditional: Unless you are a very large customer, you will be charged shipping. You may also be billed for a number of additional expenses, such as a drop-ship fee, remote warehouse fee, or a fuel surcharge. Distributors ship a lot and get very low rates, however they add a profit margin to the shipping charges you pay of 35% or more.
LPS: You may use your UPS or FedEx shipping account or you may take advantage or our discounted FedEx and UPS contracts. If we can use your account, you will get free shipping any time we get free shipping!
Things to Consider
1. Because of their purchasing power, large distributors have the better costs in many cases. If you are a large buyer of lab supplies, the big distributors will be keenly interested in negotiating a contract. If you are smaller, you may be offered a “generic” contract or you could join a statewide buying group. The only thing that assures you that you will consistently get preferential pricing is: 1) You are a large buyer of lab supplies and 2) You are willing to sign a multi-year contract. LPS mission is to serve small and mid-size customers, not the multi-million dollar Fortune 100 companies.
2. Shipping of items will not be consolidated and, depending on your location, may take a little longer. To achieve savings, LPS utilizes drop shipments wherever possible. Traditional distributors do this on items not in their big warehouses. This means you will get more shipments and the lead times may be a day or two longer. Tracking numbers may take longer to receive than you are used to.
3. Traditional distributors may have more than a million items in their online catalogs. Most customers are used to searching within the distributor catalog and ordering the item with the price listed. LPS asks it’s clients to tell us what they wish to purchase. We then research the item, find alternatives if we are asked to look and within 24-hours assign a customer specific part number to that item so that it can be ordered online. This structured process nearly always results in significant savings. For impulse buyers, it may take a bit of getting used to. If your management has set cost saving goals for your department, you will really appreciate LPS research and sourcing methods!