Few managers today are unfamiliar with the concept of economies of scale. This economic principle, according to which the purchase of raw materials or services in larger quantities makes it possible to achieve savings per unit, is in reality not the exclusive privilege of the largest. This principle is also at the heart of the cooperative concept: coming together to buy jointly and contribute to each other’s performance by sharing production tools such as more advantageous rates. So how can this principle be applied and used by clubs?
A professional football or rugby club generally relies on around 60 different suppliers for the operation of its infrastructure and the development of its performance each year. These are often multi-year contracts negotiated privately by the departments directly concerned. The coach will choose which of Deeptimize or StatsPerform offers the most suitable solution for the analysis of his data, just as the F&B manager will choose the caterer for his boxes. However, the specificity of companies that achieve economies of scale often lies in the organization of a rather specific function: the purchasing department.
Today, clubs face several challenges in their purchasing strategy:
- The willingness to obtain the best possible price for a quality of service that meets their needs
- The need to find service providers with sometimes very specific expertise that is difficult to source
- The desire to involve local economic actors and promote short supply chains, in line with an often strong territorial identity
- The ambition to improve the club’s environmental impact by reducing the carbon footprint of their products but also by having recourse to the circular economy
All of these issues are part of the daily life of a purchasing department in a large company. The teams in these departments invest in sourcing the most relevant suppliers and carry out market and competition studies before defining the scope of the calls for tenders they conduct in order to obtain the best service at the most advantageous price while contributing to all the issues mentioned above. That said, few clubs today have such departments, due to a lack of resources but also to the number of contracts they have to negotiate.
New structures are emerging to enable clubs to outsource these purchasing functions, which are often too large for SMEs such as them, unable to cope with such significant fixed costs. Service providers such as BOXtoBOX Conseil offer clubs the opportunity to operate their purchasing function independently, remunerating themselves on the optimization of renegotiated contracts, enabling them to reduce costs while making them variable.
These companies act as real databases, aware of the strengths and weaknesses of the various suppliers in the sector and able to direct clubs to those whose added value best meets their needs. They are also able to delve into the ecosystem of service providers in the territory concerned in order to enable clubs to strengthen their presence in the local economic fabric, a way of generating enthusiasm among local entrepreneurs, who are necessary for the life of the club in every respect. But where their real added value also lies is that they are able to operate as purchasing centers. By using similar service providers for different players in the ecosystem (stadiums, clubs, federations, event organizers, etc.), they are able to negotiate advantageous rates for their customers thanks to economies of scale. Who said that it was necessary to be a large company to achieve economies of scale on purchases?
In the end, purchasing strategies contribute to the three pillars of performance : they strengthen the links between the clubs and the corporate ecosystem on a local perspective, contributing to its identity. It helps reduce the costs of day-to-day operations, contributing to financial performance and thus contributes to increasing cash available to invest in sports performance. A purchasing investment that appears to be a great deal for the overall development of the company.