With a tariff war looming between China and the United States, one concern for manufacturers is the potential impact on the cost of materials and parts. Fortunately, China’s latest round of tariff cuts in late September includes some common manufacturing materials, which may help offset rising costs. But concerns about the potential future effect of trade tensions on materials costs remain, making it imperative for home-based business owners who rely on materials such as auto parts and medical parts to start thinking about ways to manage their production costs in the event of tariff escalations.
One strategy for cutting the costs of materials is to buy parts in bulk. Implementing this strategy effectively requires knowing what to pay attention to when ordering in volume and how to avoid potential pitfalls.
Do Comparison Shopping
One critical step in maximizing the benefits of volume discounts is comparing prices from competing suppliers before going with one. You can start your search online by looking at wholesale supplier directories. Look for category menus in general directories, such as Wholesale Central, which has an auto parts section, or Inventory Source, which has a medical supplies section. You can also find specialized directories, such as Buy Auto Parts and Henry Schein Medical. There are also suppliers who specialize in specific parts, such as o-ring supplier Apple Rubber, which carries over 7,000 sizes of products made of materials used for automotive and medical applications such as Viton and silicone. Once you’ve made a list of potential suppliers, you can start asking for quotes.
While you’re getting quotes, you can also compare suppliers for service. How fast a supplier responds to your request for a quote can tell you a lot about their customer service. You can also ask about their terms of service and whether they offer guarantees. For more insight into their customer service, you can read customer reviews or ask for testimonials or references to talk to some of their customers.
Explore Materials Options
While comparing suppliers, you can also compare different options for materials, which may be a way to cut your costs as well as improve your product. A common mistake companies make when developing prototypes or starting production is to go with the most expensive material available, on the assumption that this will improve quality. In some cases, more expensive means better quality, but often, it simply means higher costs. For instance, in the aircraft industry, it would be possible to build a plane entirely from titanium, but it would also be expensive compared to building the bulk of the plane from aluminum and only using titanium for parts that need extra temperature resistance, such as engines, skins and landing gear.
It may help save you money to talk to your parts supplier while your product is still in the prototyping stage. Suppliers are often informed about the latest in materials innovations, and may be able to suggest a material that can do the job you need at a lower price. To return to our aircraft example, nanotechnology researchers have recently developed an alloy that is as strong and light as titanium, but costs a tenth as much. Similarly, an informed o-ring supplier may be familiar with the latest rubber innovations for auto engine or medical seal materials and can suggest the most cost-efficient material for a particular application.
Double-Check Your Measurements
Another common mistake companies make when ordering in bulk is to order a product without first requesting a test sample. The problem with this is that if there’s a bug in your design, or if your supplier misunderstood your directions, you may end up paying for a volume order of a part that doesn’t fit.
To prevent this, make sure to verify your measurements before placing a volume order. Use the most precise units possible when making your measurements, and order a test sample to make sure everything fits before placing a bulk order. If you’re ordering your part from your supplier’s catalog, double-check the SKU number to make sure it’s the correct part. If you’re building a custom part, use precise blueprints to make sure your supplier understands your specs. A rapid prototyping service, 3-D modeling designer or engineer can help you make sure your blueprint is accurate.
Comparing suppliers, prices and materials and double-checking your measurements with a test sample will help keep your costs down when ordering in bulk. Following these principles will make sure that you get the parts you need at a price that meets your budget.
