Tips and Resources for Maximizing Your Lab Spend

There are many resources and strategies available to help lab managers streamline the procurement process and find the best deals on equipment and supplies

By Donna Kridelbaugh

Labs spend a great deal of time evaluating purchasing decisions and how best to stretch their lab budget. There are many resources and strategies available to help lab managers streamline the procurement process and find the best deals on equipment and supplies. This article features a roundup of useful tips from lab professionals we reached out to on social media and additional resources to help you make the most of your lab dollars.

Identify whether to buy

The first step in the purchasing process is to identify whether you need to buy a piece of equipment. For major equipment needs, stay updated on the latest trends in technology and instrumentation that may be required to meet your business objectives or lab goals. For example, Don Newton, a clinical laboratory consultant, assesses equipment needs for the clinical lab based on the level of test volumes currently being used or outsourced and potential services that can be offered to meet customer needs.

Another related equipment purchasing decision is whether to buy direct or to lease.1 Leasing, for example, may be a good option if the up-front capital investment is too much or the technology rapidly changes, requiring frequent upgrades.2 However, if a service is not needed often and/or it’s cheaper to do so, it may make the most business sense to outsource services to another lab (e.g., another member of a service delivery network) or use a shared lab space or a user facility that has the equipment you need.

Likewise, with supplies, good lab management practices and systems can stretch your lab dollars even further. The use of a centralized inventory management and ordering system will give an accurate estimate of supply consumption, ensure timely reordering of supplies to avoid rush delivery charges, and enable the sharing of reagents and equipment among lab groups. 3,4 Olive Romero, an administrative lab director, mentioned on LinkedIn that continuous process improvement and standardization keep costs down by reducing wasted supplies and reagents.

Use online tools for product and price comparisons

In the past, lab managers have wasted precious hours flipping through vendor catalogs or navigating multiple web browser windows to find comparable products and the best prices. Luckily, technology is making that chore easier. For example, Lab Manager provides an annual product resource guide and related lab product pages to help guide your decision-making process.5,6

There are also a number of price comparison websites that can cross-reference products and aggregate pricing data. One new and free option is Lab Spend (labspend.com), which was developed by lab supplier P212121. The platform offers multiple ways to find the best price on lab supplies, including the ability to request quotes from over 100 vendors, a crossreferenced catalog of over 500,000 products, and a CAS-based search engine that compares prices from a database of more than 3,000,000 chemicals. Other features include spending analytics and the unique open-pricing module that visually displays the median, mean, and range of prices other labs have paid for over 5,000,000 products.

Additionally, the use of a procurement service can be worth the investment. For example, HappiLabs offers a service with virtual lab managers who shop around to find good deals and leverage a network of established vendor relationships to save you time and money.7

Negotiate with vendors

Many of the lab professionals who commented on social media unanimously endorsed obtaining multiple quotes from different vendors, for both equipment and supplies, and using that information to leverage cost savings from competing vendors. By openly shopping around, they were able to get huge discounts and freebies too. This especially works if competition is high in your market area.

Reddit user “Eigengrad” also emphasized, “Long term, make sure that every time you don’t buy from a [vendor] rep, you let them know that it’s all about the pricing, and let them know what price you ended up paying. I find that helps motivate them to give a better quote (if possible) in the future, rather than assuming you just didn’t buy it.”

And Reddit user “bazoos” takes a streamlined approach to cost comparison and negotiations: “I asked some of my vendors for a master quote of a list of all of the supplies that we use. Then, I made a comparison quote between them, chose the lowest-cost products, and used the info to negotiate prices down. [It] cut our costs down by about 20 percent.”

The negotiation process also applies to leasing equipment. A clinical lab director shared on Reddit, “If you have been using one vendor for a while, when it comes time to look over a new [equipment] lease, let them know you’ve been talking to their competitor. It is amazing how unmentioned promotional deals will suddenly appear, and how reagent pricing can be lowered to beat the competitor’s offer. I have used this twice to secure outrageous promotional deals that have ended up saving hundreds of thousands of dollars over a five-year period.”

It also pays to maintain good relationships with vendor representatives. When making purchasing decisions, you can ask for samples of consumables to try out, request in-house product demonstrations, or take samples to the vendor site for testing on equipment models. Also, stay updated on any upcoming or ongoing promotions. For example, some vendors may provide assistance with startup costs by offering special packages for new labs.

Check on group purchasing options

Savings can also be obtained through group purchasing options. Check to see whether your institution has a blanket vendor discount or belongs to a group purchasing organization that offers vendor discounts and additional services (e.g., supply chain analysis).8 Newton further recommends partnering up with another lab or facility to purchase co-needed equipment, which may yield additional discounts in the bidding process.

Related Article: Managing Your Lab Budget for Improved Efficiency

Other cost savings can be obtained by buying in bulk based on negotiated vendor discounts and saving on shipping costs. Nicole Paulk, assistant adjunct professor at the University of California, San Francisco, suggests talking to your department to see whether common reagents can be purchased in bulk for use across labs. But as Ruth Brock pointed out on LinkedIn, be sure that any consumables contracts don’t have a penalty for not meeting volume expectations.

Look for alternative suppliers

Another source of lab equipment at reduced costs is to buy used and/or at auction. For clinical labs, Newton remarks, “The other thing to look at is the ‘gently used’ and ‘refurbished’ analyzer market. If you are on a tight budget, there can be some big savings here, if you are willing to take a chance. Just remember to calculate the risk vs. reward data no matter what [purchasing] path and analyzer you choose.”

Erica Tennenhouse has published a number of related articles in Lab Manager that outline how to source used equipment and best practices for purchasing.9,10,11 Additionally, LabX Media Group, the parent company of Lab Manager, runs an online marketplace (e.g., auction, classifieds) for selling and buying lab equipment (www.labx.com).12 Also of note, Paulk suggested looking for startups and biotech companies that have gone out of business to see what equipment may be for sale.

Another Reddit user, commenting anonymously, advises lab managers to research which products (e.g., pipettes, vortexes, mini-centrifuges) sold by smaller distributors without manufacturing facilities are available elsewhere for a lower price, just with a different private label on them. Many of these products can be found for a fraction of the cost on international wholesaler websites (e.g., Ali Baba) that eliminate the need to go through an intermediate distributor. However, Brian Huesgen, global process and quality manager for Carboline Company, cautions, “Make sure you are buying from a reputable supplier. Depending on the country, fakes and forgeries can be common. Before we buy equipment from a distributor, we contact the manufacturer to ensure that what we are getting is their equipment.”

Get creative to reduce lab costs

Just as important as knowing your organization’s purchasing policies is knowing how to circumvent them to take advantage of negotiated vendor discounts and buying from alternate suppliers. For example, in order for Reddit user “bazoos” to place an order with previously negotiated pricing, individual lab accounts separate from the university ordering system had to be set up and quotes then forwarded to the department’s administrative assistant to be purchased as a “special order.”

Getting creative in the lab also can yield cost savings in reagents and supplies. For example, check out this recent Lab Manager article for some simple lab hacks.13 Similarly, Alex Klenov of York University in Ontario, Canada, emphasized in a Reddit comment how much labs can save via DIY lab reagents and equipment, such as making your own DNA-polymerase batch for routine PCRs or buffers for DNA extractions. You can read more of Klenov’s tips on the Pipette Jockey blog (pipettejockey.com).

And as an MLS lab supervisor pointed out on Reddit, “Companies often try to upsell you on buying their reagents and their cleaners when you can very cheaply make your own … Make sure to ask which reagents absolutely need to be used with the system and what the upkeep costs to reorder will be.” However, another medical lab professional warned that in some cases the use of unauthorized reagents may void a service agreement and make you liable for the cost of service, so be sure to check the details of the contract before using third party supplies.

Last, a worthwhile way to save money is to donate your used lab equipment. For example, Seeding Labs is a nonprofit organization that provides equipment to scientists in low- and middle-income countries through its Instrumental Access program.14 Robert Lillianfeld, director of corporate relations for Seeding Labs, explains there are business benefits to donation (e.g., saving on storage costs, tax deductions), but overall, donors do so because of the positive impact for other scientists. As he explains, “Our donors really connect with our mission of giving talented people everywhere the opportunity to make life better through science.”

Footnotes:

1. Kalavakunta, H. R. (2013) Lab Equipment Procurement Models and Trends. Lab Manager. http://www.labmanager.com/lab-design-and-furnishings/2013/09/lab-equipment-procurement-models-and-trends 

2. Hernandez, M. and Regan, K. (2014) To Buy or Not to Buy? Purchasing Decisions in the Clinical Lab. Becker’s Hospital Review. https://www.beckershospitalreview.com/supply-chain/to-buy-or-not-to-buy-purchasing-decisions-in-the-clinical-lab.html 

3. M2 Scientifics. (2015) Lab Inventory Management Guide. Lab Manager. http://www.labmanager.com/business-management/2015/02/lab-inventory-management-guide 

4. Dolgin, E. (2018) How going green can raise cash for your lab. Nature. https://www.nature.com/articles/d41586-018-01601-5 

5. http://www.labmanager.com/magazine/issue/2017/08/2018-Product-Resource-Guide 

6. http://www.labmanager.com/lab-products 

7. HappiLabs. (2015) How Saving Resources and Simplifying Lab Management Works. Lab Manager. http://www.labmanager.com/how-itworks/2015/12/how-saving-resources-and-simplifying-lab-management-works 

8. Healthcare Supply Chain Association. Frequently Asked Questions. http://www.supplychainassociation.org/?page=FAQ 

9. Tennenhouse, E. (2017) Options for Sourcing Used Lab Equipment. Lab Manager. http://www.labmanager.com/business-management/2017/04/options-for-sourcing-used-equipment 

10. Tennenhouse, E. (2017) Negotiating on Used Lab Equipment. Lab Manager. http://www.labmanager.com/business-management/2017/07/negotiating-on-used-lab-equipment 

11. Tennenhouse, E. (2018) Tips for Purchasing Pre-Owned Equipment Laboratory Equipment at Auctions. Lab Manager. http://www.labmanager.com/business-management/2018/01/tips-for-purchasing-preowned-equipment-at-auctions 

12. https://www.labx.com/ 

13. Tay, A. (2018) Creative New Uses for Common Laboratory Equipment. Lab Manager. http://www.labmanager.com/laboratory-technology/2018/01/creative-new-uses-for-common-laboratory-supplies 

14. Muenz, R. (2016) 5 Reasons to Partner with Seeding Labs. Lab Manager. http://www.labmanager.com/business-management/2016/05/5-reasons-to-partner-with-seeding-labs 

Categories: Business Management

Published In

The Price of Science Magazine Issue Cover
The Price of Science

Published: May 14, 2018

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