Capital Efficiency | Automation

Distributor behind-the-scenes: What you should know before ordering your favorite pipette

The global laboratory supplies market is expected to grow from $35 billion in 2023 to $47.12 billion by 2027. Most biotech and pharma companies have historically turned to the major distributors to procure their supplies. The question is, who has the power in these marketplace relationships? The buyer or the seller?

To answer that question, it’s important to first understand what a well-functioning marketplace should look like, before you order your favorite pipette.

Healthy marketplaces are:

  • Competitive, with prices set by supply and demand
  • Efficient, with resources allocated in the most productive way possible and goods and services produced at the lowest possible cost
  • Transparent, with all participants having access to the same information and prices set based on all available information

In the distributor model, distributors serve as the intermediary between manufacturers and the labs. Some distributors merely broker the transaction, while others procure inventory from the manufacturer, warehouse it, and then distribute it. Either way, this model is margin-based, adding unnecessary time, expense, and layers to the lab supply ordering process.

Distributor models result in:

  • Lack of pricing transparency, with prices that fluctuate from customer to customer and day to day
  • Lack of transparency into inventory levels and delivery dates, increasing the frequency of backorders and out of stock situations
  • Clunky, out-of-date catalogs, presenting problematic pricing, inaccurate stock information, and scientific choice obstacles
  • Lack of consolidated invoicing and order history, resulting in inter-company ordering redundancies
  • Higher prices to compensate for production costs, transportation costs, and storage fees, while still finding margins for profit
  • Prioritization of larger customers in times of limited supply due to physical, inventory-based business model

How to give purchasing power back to the lab with a lab supply marketplace

When you compare the characteristics of a healthy marketplace with the distributor model, you see that the buyer is not in the driver’s seat. Since a distributor’s entire pricing strategy is based on margins and lack of transparency, you wind up paying more for the items you need.

Lab supply marketplaces, such as ZAGENO, give the power back to buyers by offering full transparency and an open market. The key is to make the ordering process as Amazon-like as possible, with access to millions of products from thousands of suppliers who transparently compete for your business based on price, availability, and quality.

How lab supply marketplaces can offer all-sized labs the same ordering leverage as the biggest labs

With ZAGENO, you can build a cart from over 40 million products across 3,500 suppliers, rated according to ZAGENO’s comprehensive, unbiased Scientific Score rating. You can also track costs with ZAGENO’s detailed, up-to-date spend analysis dashboard.

ZAGENO functions as an efficient marketplace should, with competitive, transparent prices set by supply and demand and crucial information, such as delivery dates and inventory levels, updated in real-time and available to all. When suppliers compete for your business, no matter the size, you win. Contact ZAGENO to find out how.

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