PRICE AND QUALITY
THOUGHTS ON PRICE AND QUALITY.
If Malwin's price is higher than Brand X, perhaps we could take some or all of the following steps:
A) Malwin could procure all of our outside services from the lowest bidder irrespective of quality.
B) We could use surplus components.
C) Burn in testing on all delivered instruments could be eliminated.
D) Vibration testing on all delivered instruments could be eliminated.
E) Warranty periods could be shortened.
F) We could lengthen delivery time on warranty repairs.
CAREFULLY CONSIDER THE FOLLOWING:
More than 85% of the instruments Malwin ships will not be returned for repair for at least 5 years.
Typically, Instruments delivered by Brand X will not make it through the first 2 years. Therefore, the price you paid Brand X is too high if it exceeds 50% of the Malwin price
If you choose to buy strictly by price then you must develop detailed specifications for the product which contain an absolute standard of acceptance. Over time marginal vendors will be weeded out, a very expensive process.
If you buy better equipment the following will occur surely as night follows day:
You will have fewer unscheduled equipment removals.
Spares requirements and maintenance budgets will be reduced.
Your equipment will be more highly regarded by your customers.
No one has ever summarized the preceding paragraphs more succinctly than philosopher John Ruskin, who wrote the following:
PRICE
"It's unwise to pay too much, but, it's worse to pay too little. When you pay too much you lose a little money, that's all. When you pay too little, you sometimes lose everything, because the thing you bought is incapable of doing what it was bought to do.
The common law of business balance prohibits paying a little and getting a lot. It can't be done.
If you deal with the lowest bidder it is well to add something for the risk you run. And if you do that you will have to pay enough for something better.
There is hardly anything in the world that someone can't make a little worse and sell a little cheaper--- and people who consider price alone are this man's prey."
John Ruskin (1819 - 1900)