Business Thought

The Hidden Cost of Low Price

Magnets as Commodities and Price Competition

In today’s market, magnets are often treated as commodities, and Chinese magnet companies are engaged in intense price competition. This may work well for purchasing managers whose responsibility is to reduce costs for regular orders, provided that robust quality control practices are in place.

Beyond Price in Early Project Stages

When purchasing magnets for a new project in the prototyping or sampling stage, price is merely the tip of the iceberg. Consider this: one scenario involves working directly with a salesperson who focuses solely on commercial aspects. In contrast, the other scenario involves a person who delves into your application settings, actively collaborates on enhancing your product during the initial design stage, and contributes their expertise and experience in magnets. This collaborative approach aims not just for cost considerations but for creating a product that has the potential to sell better.

Typically, the second individual may quote a higher price because they know their value and understand that a low-profit situation is not sustainable. Even if it persists, innovation and customer service would be compromised. However, innovation and responsive, resourceful customer service from a supplier are game-changers, far surpassing the small costs saved from buying magnets.

Lessons from Low-Profit Orders

I’ve been through that tough situation where I goofed by accepting low-profit orders. Later on, I found myself demotivated because my time and energy were completely tied up. I started thinking it would be more worthwhile to invest my limited bandwidth elsewhere. As a result, we’re not generating new ideas that could have made the product more cost-effective. Our dedication to customer service has taken a hit, which is not good for both us and our customers.

Empowering Customer Success

We exclusively partner with customers who share our values, contribute innovative ideas, and showcase responsiveness and resourcefulness in customer service. Our goal is not to be just a built-to-print manufacturer but rather a magnet company that actively contributes to our customers’ success. We achieve this by introducing innovative ideas and maintaining a responsive and resourceful approach.

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