What to Look for in a Capital Goods Supplier
If you intend to start a manufacturing business, there will be a few steps to take in order to ensure that you are able to source the capital goods that you require to produce products that promise customer satisfaction. Capital goods refer to the items, ingredients, and/or materials used to manufacture products – and the reality is that they are not all created equal! Below are some tips on what to look for in a capital goods supplier and how to build a mutually beneficial long-term relationship between your two organizations.
Price
It is obvious that you will need to source your materials at an affordable price so as to provide your customers with a great product, all the while still managing to rack up a decent profit for your business. Therefore, it is important to take the time to request quotes and compare prices.
Always enquire how much of a discount is available when purchasing in bulk, as it often makes financial sense to adopt this approach. Be careful, though. If your establishment is still in its infancy stages, you need to think twice before spending huge amounts of money on materials. This is especially true if you are still ‘feeling out’ the market and testing the demand and reception of your products.
Quality
Never allow the price of capital goods to be the only deciding factor when selecting a supplier. Ultimately, if the materials are cheap, but not of decent quality, your resultant products are likely to fail to meet expectations. This is sure to prompt customers to go in search of better quality from your competitors, leading to a significant profit loss in the long run. Spend a bit more on better quality materials in order to produce superior products and you can be sure that your customers will keep returning for more. Consistent quality is at the core of every successful business!
Variety
It helps to find a single supplier that can provide you with all of the materials and goods that you require. Not only is this advantageous from a convenience perspective, but it is likely to save you a fair amount of money, too. So, for example, if you start an appliance manufacturing business, it is great to find a supplier that can offer you a host of different float switch varieties, from flow switches for HVAC units to mechanical sump switches for sump pumps.
Guarantee
A supplier that offers a guarantee on its goods and materials can provide you with greater peace of mind that you are making a solid purchase decision. It also safeguards you from a cost perspective should the materials not meet your expectations. Always enquire with any potential supplier whether or not they have guarantees in place before agreeing to do business with them.
Being cautious about which supplier(s) that you partner with could mean the difference between happy customers and no customers at all! As such, you will be relieved if you make this decision a top priority right from the beginning.
