Do you really need to sell them cheap ?
- Published: Thursday, 29 August 2013 08:28
Timeguard managing director Andy Douglas argues that it is LOWER but not necessarily LOWEST prices that equate to best value.
We have all had to adapt to the eastwards drift of manufacturing, with high volume production in our industry almost exclusively undertaken in the Far East. The trend has been unstoppable as production techniques have improved, allowing for faster turnaround of new designs. The downside of this of course, is that it can also mean quicker cloning of other manufacturers’ innovations, and the logistics wizards, (the real power brokers of globalisation), have made it profitable to import ever-smaller orders cost-effectively. Manufacturers, however, have stepped up to the plate by keeping one step ahead and continue to bring new ideas to market.
The end result of all the production-side cost savings that come from outsourcing overseas should be (as the title suggests) lower prices for the user, but we must not get too obsessed with rock bottom pricing, because we all know where that leads and once you’ve given it away, and complain about low margins, it’s tough to get pricing and margins up again. Look at the U.K insurance market: consumers have all been seduced in droves by those irritating TV advertisements that promise ever-lower premiums, only to find that they really don’t have much actual cover when they come to make a claim! The same basic market principle also goes for the goods we are selling and distributing: you get what you pay for!
My company has always traded on great value and quality, because out there today, there are very good, plain average and downright bad products arriving in someones containers, but we can come up against market resistance because it can be hard to tell the difference between good and bad when it is all hidden within a plastic casing. “Why pay more?” we hear.
With products like our NightEYE LED security lights or our Weathersafe Vision see-through 13A switched sockets for use outdoors, the difference is clear to see and people will always take a second look before passing these market leaders over for a cheaper alternative. The same cannot be said of a PIR controller or an RCD socket. Yes, we have invested in the benefits of aesthetics of product design here to, but so too have other manufacturers, and their products can look pretty without them having made an investment in the products fundamental re-design of the electrical control behind them.
For example, anyone can put an off-the-shelf chip with dozens of settings into a time switch casing – but not everyone can do it well ! Given, too, that most of their business comes from word of mouth, installers will want devices that work reliably and work for a long time – “fit and forget” - and that is especially true for the workhorses of modern electrical control: time switches and PIR detectors. So our job is to offer superior products and to help your customers tell the difference easily.
So what makes a product different and better from the one next to it? What is it that helps your customer to make the right choice – based on value as much as price – and increases the likelihood of complete satisfaction and repeat business for you?
Trusted branding and plenty of specification information at the point of sale are vital. I would suggest that if a manufacturer’s revenue model means they can only put a product in a basic package, the modern equivalent of a plain brown box, then you may expect that there has not been a massive investment in the product design and even manufacturing Q.A. Our sturdy, illustrated packaging adds only a bit to the cost of a product and I simply therefore don’t understand why others have not followed suit. If margins are that tight, then the company’s future (and levels of customer support they provide) must be in doubt.
ISO 9001:2008 certification is a good sign-post for quality. The standard lays down the requirements for a quality management system meeting customer and regulatory requirements. It provides real reassurance that a product will do a good job, do it safely, and do it for a long time. ISO9001 certification is not easy to achieve, and firms invest significant time and resources into achieving it, so take it as a serious badge of honour when you see it. And, if someone hasn’t got it, ask why not!
A supplier who is up front and available is also a sure sign of quality – as it is manufacturers, not you, who should be available when required to deal with technical and quality issues. Are you buying a product with No product guarantee? and no address, or phone number or email on the packaging to manage queries and complaints directly? Surely that’s a worry in anyones book. So, at the end of the day, getting the right mix of Quality, Brand, Design, Packaging, Technical & Customer Support and yes, “Pricing” really can add up to improving margins and long-term customer satisfaction. Over to you !