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‘Cost Recycling’ Should Be Front Of Mind For Disruptive Procurement Teams

‘Cost Recycling’ Should Be Front Of Mind For Disruptive Procurement Teams

The term ‘cost recycling’ can often be confused with the cost to a firm of recycling items like paper or plastic cups after they have been used. What it refers to in actuality is the process whereby surplus items of already purchased stock can be re-sold allowing for costs to be recouped.

Procurement functions are targeted on cost saving, achieved by either the reduction of demand (cost avoidance) or by the ability to negotiate more favourable contractual terms (cost reduction). However, progressive organisations who want their procurement teams to act in a way that is aligned with today's corporate approach to sustainability and responsible business, should consider ‘cost recycling’ as an added measure.

What does this look like in practice?

Company X runs a series of corporate events and conferences each year for employees or clients. Gifts and merchandising (branded notepads, phone chargers etc.) are purchased for attendees. The event organiser over-orders to ensure that they have sufficient items and after the event surplus stock needs to be shipped back to the firm’s headquarters where they are stored or disposed of. The consideration of ‘cost recycling’ would mean that these items could be sold to employees and the funds raised go to charity instead.

Company Y has a sponsorship agreement which provides the firm with tickets to sporting events. Less popular events are not of interest to teams wanting to entertain clients, and tickets regularly go unclaimed. Tickets to these events could be auctioned off to staff, filling seats and raising funds for the company’s partner charity.

The revenue generated could be offset against the cost and measured as a cost saving. Alternatively, they could be donated to a charity of the firm’s choosing.

GivGo specialises in online fundraising for companies in aid of their charities, by giving employees the exclusive opportunity to bid for experiences and merchandise, as well as to donate directly to the cause. Check out our website or email us at to explore which option works best work for your firm.