2021-07-30
In the market, the one principle we hear most is "value determines price". For many customers, the first thing they notice is the price of the product. Under normal circumstances, if there are no special strict requirements, the standard quality of a product is acceptable to most customers, and the price becomes the most important buying factor. However, in the long run, a low-quality product will harm the profit and reputation of the seller and negatively impact the experience of the buyer. The hidden costs of low-quality products are often overlooked by the buyer. These hidden costs are may look like a shortcut, but they’re actually like a rugged and broken path – and just when you think you’ve taken a shortcut, your shoes are already worn out!
1. What are these Hidden Costs?
Before talking about hidden costs, we should mention that most buyers are no stranger to "quality costs" – and these can be divided into two categories, the cost of failure and prevention costs. Most "Hidden costs" are from these two major cost sources. The details are shown in the figure below.
2. The impact of HIDDEN COSTS
Does the above mind map evoke some memories from when you bought and sold products in the past? It may remind you that there are some inadvertent details that when overlooked, always result in some loss, which may not be obvious - but it will astonish you when calculating the total cost of products. These are the actually hidden costs. Some people will say that these are not important and that the real power is in big sales, high popularity, and high profits.
There is a very classical saying that goes, "It is a pebble in your shoe that beats you on the road”. This hidden cost is just like that pebble, slowly harming the business.
For a short period of time, these low-quality products might appear to be super cost-effective, coaxing more customers to buy, but the low-cost mask will eventually come off. In fact, the hidden costs of low-quality products can accumulate enough to kill a seller.
Currently, many companies around the world have begun to pay attention to the hidden costs of products, and are willing to pay more attention to quality, research in order to solve more problems. They believe that this will bring them huge benefits. For example, one less customer service call can produce a huge butterfly effect.
3. The Way to Save Money
Now, it’s time to take action! Obviously, the most direct way to stop losses over time is to purchase high-quality products. High-quality products are usually accompanied by slightly higher prices than low-quality products because of better raw materials, higher-quality employees, more advanced manufacturing technology, and so on.
Firstly, in terms of processing failure costs, high-quality products reduce re-inspection procedures and any time delays. Repeated inspections are time-consuming and labor-intensive, and in the end, may still be impossible to solve the product problem from the root cause, which may only backfire. High quality also results in having to deal with other external failure costs less often including customer questions, returns, complaints, product modifications, warranty issues, and more. These are small issues with headaches that directly aggravate the ability of a company to operate efficiently and smoothly.
Another particularly important aspect of dealing with the cost of external failures is the company's social image. No company wants to expose itself to the public with an embarrassing image full of abuses and rumors-but low-quality products will result in just that. The speed of public opinion is faster than you think. In an instant, a company can be labeled as a "Black-hearted Seller who makes inferior products". Currently, it is very difficult and expensive to dispatch a public relations team to clean up public opinion.
Secondly, in terms of dealing with prevention costs, putting high-quality products in the market does not directly impact a company’s quality, inspection processes, or other internal management standards. High-quality products will reduce a lot of unfounded doubts and it’s important to note that these unfounded doubts can result in huge losses for a business. Obviously, a company’s supplier is primarily the one to blame for quality problems. Therefore, when looking for a high-quality supplier one should look at the products they have in the market, are they respected and reputable, are they financially strong and do they have experience in solving quality problems? It’s important to carefully consider these areas when looking at suppliers. Also, just as important, does the supplier make the purchasing process easy and error-free, with ease throughout the process, from inspection to after-sale support?
As you can see, if not quickly addressed, the high cost of low quality can result in lost profits and a negative reputation to the customers you serve. LUMI understands this and does everything possible to provide the highest quality, most affordable products.
4. Choose Quality, Choose LUMI, Choose to Save Money
① Abundant high-quality products, raw materials, design, packaging...presented with heart；
② Comprehensive after-sales service and clear communication continues to follow up, LUMI vida and TreeFruit will always care about your needs;
③ Adhering to the concept of customer first, pragmatism and active innovation – our goal to become a better supplier to the world.
Please contact us:
info@lumi.cn
http://www.lumivida.com/
https://www.treefruit.cn/
Picture Reference:
https://unsplash.com/photos/Xeo_7HSwYsA Photo by Thought Catalog on Unsplash
https://unsplash.com/photos/ZVprbBmT8QA Photo by Micheile Henderson on Unsplash
https://unsplash.com/photos/otjiUhq5Zcw Photo by Andrea Natali on Unsplash
https://unsplash.com/photos/0XHo26Jb8dk Photo by Henry Xu on Unsplash
https://unsplash.com/photos/r-enAOPw8Rs Photo by Icons8 Team on Unsplash