Your Procurement Process Costs More Than Your Parts

If you had to guess what a $4 part actually costs your business, you'd probably say $4. You'd be counting only about a third of what it really costs.

The RS and CIPS Indirect Procurement Report found that the soft costs of sourcing, ordering and inventory can account for 60–70% of the total cost of ownership of maintenance and operations items, with only 30–40% being the product itself — so the process often costs about twice as much as the item. The purchase order, the supplier hunt, the price comparison, the follow-up calls, the receiving and reconciliation — that overhead is the iceberg beneath every cheap part you buy.

And it compounds. Indirect spend — all the non-production purchasing that keeps a business running — can represent 10, 15, or even 18 percent of revenue in some industries, according to McKinsey. Much of it is fragmented across dozens of suppliers. RS's 2025 report put the average at 92 maintenance-and-operations suppliers, with the share of businesses juggling more than 250 jumping from 6% in 2023 to 15%.

That fragmentation isn't a filing problem. It's a profit leak.

Where the money actually goes

Three structural costs hide inside "just ordering a part":

• Search cost. Finding who can supply a non-standard item means juggling relationships across multiple distributors and brokers — phone calls, emails, stock checks. That administrative overload is time stolen from actual work.
• Markup cost. Every intermediary in the chain takes a cut — money that never reaches whoever actually makes or moves the part.
• Inventory cost. When suppliers impose minimums, you over-order to hit a price break, and the excess sits as dead capital on a shelf.

The consolidation everyone's chasing

The procurement world already knows this is broken. The 2026 RS Indirect Procurement Report shows the average supplier count falling — from 92 to 83 — as organizations actively consolidate: half of respondents (50%) cited cutting the number of suppliers as one of the tactics they're using to cope with cost pressure.

The problem is that consolidation usually means signing bigger contracts with bigger distributors — trading one kind of rigidity for another. You get fewer invoices, but you're still locked into catalog pricing, minimums, and lead times you don't control.

A different kind of consolidation

The Spool List consolidates differently: not into one big supplier, but into one interface over many local makers. You post a job once and competing bids come to you, each showing price, lead time, and distance. You collapse the fragmented supplier base and the markup-laden broker chain into a single place — without surrendering flexibility to a national distributor.

The reverse-auction structure — buyer posts requirements, suppliers respond with bids — has been used in business purchasing since the 1990s, in categories ranging from contract manufacturing to MRO. It puts the buyer in control and makes the true local price visible.

Sources

• RS — Understanding MRO Costs (citing the RS and CIPS Indirect Procurement Report)
• CIPS — RS releases 2026 Indirect Procurement Report: "Uncertainty Driving Efficiency"
• McKinsey — Rethinking the balance in outsourcing indirect procurement
• Designing Buildings Wiki — Reverse auction
• Wikipedia — Reverse auction