When trying to buy a machinery, equipment or complementary service for your company, you will want to consider the best price, a way to minimise cost and maximise profit.
All good businesses try to minimize their expenditure in order to boost their profit margin. Whether it is by choosing the most affordable suppliers or the cheapest ingredients, companies always try to generate the highest possible profit per unit. It is hard to object to this approach; "money not spent is money earned," and why should you waste money on expensive supplies or services when you might be able to provide the same product to your customers cheaper? Saving as much as you can make sound business sense.
Why Quality should be superior to Quantity
Your Company's Credibility
Being careful with your money, though, doesn't always mean buying at the absolute cheapest price. Indeed, rather than benefitting your business, cutting costs beyond what can be considered reasonable can harm your credibility, cause you to miss good opportunities to further your brand, or even potentially put you at risk of non-compliance with industry and national standards.
Customer Satisfaction is a Priority
Saving money is important for a business, but it is as important to provide value to the people who actually allow the business to function; your customers. Satisfied customers will come back, and will often recommend you to others along the way, while the dissatisfied ones will be sure to let their friends and acquaintances know about their bad experience.
It is better to offer the best value with higher rate
According to Deborah Graham-Wilson at eland cable, good quality boost sales and create promising business deals in future.
Cutting expenditure to get a better cost-to-sales ratio could have potentially disastrous consequences if it negatively affects the perceived value of your products and services. Imagine you're purchasing materials for a new construction project and you're looking at potential suppliers. Your choice might come down to two, with the second being more expensive but including quality and compliance assurances for their products, testing to relevant standards prior to them being shipped to customers. Opting for the first company might have short-term cost savings, but if any of those products do not meet the anticipated requirements, the costs and time associated with replacement can be prohibitive, running over budget, missing deadlines and potentially affecting your ability to win further contracts.
Non-compliant products may fail earlier, with implications ranging from simple non-performance through to possible fire risk. Buying cheap may save money now but it could mean running the risk of damaging your credibility over a much longer timeframe.
The second way in which being overly spendthrift may not be good for business lies in missed marketing opportunities that can differentiate your product in a crowded marketplace; for example, using more expensive but more ethical sources for edible products in order to use the 'fair-trade' label. Sourcing your raw ingredients might be more expensive, but it's immediately recognised as being a quality product, enhancing your company's reputation, and increasing sales too. The same principle applies to adopting eco-friendly policies and 'going green'.
Becoming an environmentally-friendly business might require some upfront investment but in the longer term, it can bolster public relations and produce energy savings that benefit your bottom line.
In Conclusion, The drive to cut costs will always be there, with everyone from the Finance Director down analysing every buying decision and the price paid. Yet the cheapest option isn't always the best move for your business and you often hear the saying that "if you buy cheap, you buy twice". There's a much bigger picture to be taken into consideration than just the base cost, whether that be in terms of future-proofing hardware to anticipate demands as your business grows or in the time it takes to train your staff to effectively use the service. By all means, try to make the most of the money that you spend, but don't compromise on quality - the fate of your business might depend on it.