Contracts Should Define 'Supplies' As Specific Products
A reader writes: “Are there any percentages that I can use to compare my costs to the industry?”
The short answer is not really. The longer answer is that you need to use extreme caution in comparing different contracts due to so many variables that can come into play. Unfortunately, I do not have good data on this and we should be the ones with all the data due to our position in the industry.
As you noted, the percentages (of total contract) depend on what is and is not required. Since many of our contracts have to be green compliant the pricing is mandatory so long as we can justify it with appropriate documentation from the distributor. That is not to say that some customers choose to ignore or get around the requirements due to budgetary concerns.
For a long time, we simply referred to supplies, which distorted our comparisons based on who was providing what? Of course, we have contracts that the customer chooses to provide part or all of both expendable and consumable supplies. I define expendable as what the building service contractor uses to service the account such as glass cleaner, floor finish, etc. I define consumable as what the customer/tenants consume such as paper towels, toilet tissue, hand soap, etc. Of course, all these supplies can be green or have post-consumer content to be consider green.
Remember that the larger the contract, the lower the actual percentage even though the dollar amount can be substantial. A radical example is a $20,000 per year building compared to a multimillion-dollar facility.
Your comments and feedback are always appreciated. I hope to hear from you soon. Until then, keep it clean...
Mickey Crowe has been involved in the industry for over 35 years. He is a trainer, speaker and consultant. You can reach Mickey at 678-314-2171 or CTCG50@comcast.net.