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News
Do You ALWAYS Do The Math?

When it comes to pricing something, do you really do all the math?  If your only reason for picking one supplier over another is the price, then let's be sure that you are actually examining the full price.

I know that few distributors will admit it out loud, but I have noticed a tendency to miss important details when price shopping.

Here's the thing:

I have seen distributors get all worked up about a penny or two on price, but they fail to notice that if they buy from the other source that they are comparing to, they will pay more in freight, set-up charge, art charges, proof charges, etc.

Let's say that you are buying 1000 pieces of an item, which ABC Co charges $0.55 each for, and set-up of $36 per color.  There is a $15 proof charge.  You are in NV and this supplier is in NY.

Let's say you have a 2 color logo...

This is what you would be looking at:

Item:   $550
2 color Set-up:  $72
Proof charge:  $15
Freight:  $75
__________________
Total:  $712

Or, say compare to another supplier that charges $0.58 for this item, and one set-up of $36.  They are in CA, which is closer to you in NV.  So, in addition to a lower freight cost, you are getting the product 3 days sooner.

Item:  $580
2 color Set-up:  $36
Proof charge: $0
Freight:  $40
__________________
Total:  $656

At InnoPack...the most you will ever pay for a set-up is $36.  There is never a proof charge.  And you have the advantage of a Left Coast/West Coast Supplier.

Another place where you can really lose is on expedited freight.  So your customer is in a panic to get something on time for an event.  This may make you desperate to find a solution, but then when you factor in the expedited freight, you may have really lost out on your profit at that point.  Sometimes a distributor ends up covering the freight, and sometimes they pass it on to their client.  It depends on what caused the time crunch to occur.  But ALWAYS look at this point carefully when you are looking at a rush shipping situation.

So...the moral of the story is:  IF YOU
ARE SHOPPING ON PRICE, AND PRICE ALONE, MAKE SURE YOU REALLY DO THE MATH.

Hope this helps to remind you of details to consider when shopping on price alone.

~ Sara

Dated : 6-Jul-2010