Does your supplier pee on your leg,
then tell you its warm rain? Or, to put it more delicately, are you
getting everything you're paying for when you buy fence materials?
Chances are, unless you know your supplier and check each delivery,
what you get is what you get.
The easiest way for anyone to get your
business is to offer you a “better price”. I won't go into that
loaded term here, but let's just assume for now that means a lower
price per unit. There are a couple of ways for a supplier to do
that. One, is to buy in such large quantities that they can save
money on the unit cost, as most manufacturers and distributors offer
quantity discounts. This is unattractive to all but the very largest
of companies because of the high cost of storing and paying for
inventory. Most companies trying to drive down unit price do so by
seeking out a supplier that offers a lower price per unit for the
parts they need.
To do that, the supplier must remove
something from the product.
It takes a measurable amount of material
costs and labor costs to manufacture anything, along with
transportation cost to get it to the end user. To reduce the unit
price, one must reduce either the cost of labor, i.e. “outsource”,
or the cost of materials, or the cost of transportation. In the age
of spiralling fuel costs, cheaper transportation is very scarce, and
the cost of transportation is largely out of the control of the
supplier. Labor can be found elsewhere, much cheaper than in the U.S., but that
usually means additional transportation costs. Recent increases in
the relative wages in common outsource supply countries has led to a
closing gap in the cost of goods sourced in Asia when compared to
American made goods.
This leaves only material costs as a
means of controlling unit price. Many manufacturers are succumbing to
the pressure to drive down unit price by reducing the amount and the
quality of the raw materials they use. The alternative is to
continue making top quality products at reasonable prices to compete
with the poor quality, lower priced alternatives being dumped on the
market.
Unfortunately, for most contractors,
the alternatives are to buy poor quality, and hope the check clears
before the product fails, or try to figure out how to win a bid
against someone selling lower priced, (inferior) products. The key
is to help the customer see that by buying lower price, he is getting
lower quality, and will not be satisfied for long. It can be a
difficult sell, but Bill Gates didn't get rich clipping coupons.
The key is to teach the customer that though a component looks like
the one you are selling, it will not perform the same.
No one likes to spend too much money
for what they buy, and saving fifty dollars today and finding out
that you'll pay hundreds to repair the problems caused by the poor
quality component that you saved money on is absolutely painful.
Insist on getting what you pay for, and be ready to pay a fair price
for quality, or prepare to pay for a lot of broken promises.
