Poor Quality Costs, but Good Quality Pays: What Are the Risks of a Cheap Price?

Sustainability is a major global topic, influencing our choices when buying food, vehicles, buildings, homes, and countless other products. It factors into our travel decisions and even what we do when we arrived at our destination. But have you considered the price you are paying for all these things? While cost is often a key factor, there is much more to a transaction than meets the eye.

Before jumping at the lowest price, take a moment to consider the following points and weigh the risks you may be taking.

 

Can My Supplier Sustain Their Pricing?

In 1983, I was searching for an affordable way to build my first home. I had purchased a section and was looking at kitsets since my brother-in-law, a qualified carpenter, had offered to help me build it. One company stood out. It was a third cheaper than all the others. I signed up, received my kitset, and while there was some quality issues, my brother-in-law was able to fix them.

Encouraged by my experience, a friend of mine also signed up. However, before he could receive his kitset, the company went under, and he lost his deposit. I was lucky, but my friend wasn’t. And when I needed replacement parts a year later, the company was gone.

Even today, we hear stories of people losing deposits when construction firms collapse. Why does this happen? Often, companies undercut prices beyond what is sustainable. If you ask the right questions and do your research before committing, you can significantly reduce the risk of falling into a similar trap.

 

Is My Supplier Engaging in Price Dumping?

Some businesses temporarily lower prices to increase market share, intending to raise them later. They assume competitors won’t be able to match their low prices and will go out of business. However, in reality, well-funded competitors can sustain the downturn and outlast the under-pricing firm.

Customers drawn in by low prices often have little loyalty, moving on as soon as a cheaper option appears. A business cannot maintain significantly lower prices than its competitors indefinitely. Something will be sacrificed, be it product quality, customer service, or delivery timelines. If a supplier is engaging in price dumping, delays, lack of support, and quality issues are inevitable.

 

Are the People Involved Being Paid Fairly?

Many cheap products worldwide are produced under unethical conditions, often involving underpaid or even forced labour. Governments are increasingly legislating against importing such products, which can put your business at risk if you rely on these sources.

Even if your supplier operates in New Zealand and pays minimum wage, consider the implications. Poor wages lead to high staff turnover, lower morale, and a lack of commitment to quality. Cutting corners in labour and manufacturing never leads to long-term business success.

 

Is This Product Reliable and Durable?

If you import a rapid door at a rock-bottom price, what happens when it breaks down or get damaged? Is it made of inferior materials that will wear out within a year? Has the manufacturer conducted proper research and durability testing? Will spare parts be readily available, or will you have to carry your own stock?

Consider the infamous 1989 Partnair disaster, where a flight from Oslo to Hamburg crashed due to counterfeit bolts in the tail assembly. The bolts, lacking proper heat treatment, failed mid-flight, resulting in tragedy. While you may not be buying aircraft parts, a rapid door also relies on high-stress components. If a key part fails, the consequences can be serious, including operational downtime, costly damage, or even workplace injuries.

 

Will My Supplier Be There When Something Goes Wrong?

Many people pay for products online, only to never receive them or be unable to get support when needed. Before purchasing, check if the supplier has a track record of selling similar products nearby. Can you see the equipment in operation? Would they allow you to speak with an existing customer?

 

Is This Product Readily Available, or Will the Supply Run Out?

Some suppliers offer low prices by offloading surplus or end-of-line products. If you need another unit in the feature, will it be available? And at what cost? Some companies operate short-term to capitalise on trends, leaving customers stranded when they move on.

 

Does This Price Include Proper Installation and After-Sales Service?

I once worked for a company that lost a large equipment contract to a lower bidder. When we followed up, the customer revealed they would receive the same level of service from the cheaper supplier. Instead, they received their equipment unassembled via courier, with no training or support. It took them weeks to figure out how to set it up.

The next time they needed equipment, they came back to us.

 

Does This Product Meet New Zealand’s Safety Standards?

Some overseas products lack the safety features required by New Zealand law. For example, automatic doors in New Zealand must have safety sensors to prevent accidents. If you buy a cheap door without these features, you may face unexpected costs retrofitting them, or worse, find that the controls are incompatible with local safety systems.

 

Does the Product Meet Your Operational Needs?

A customer who had purchased numerous rapid doors from Ulti Group once decided to buy directly from overseas to cut costs. The doors functioned but leaked excessive air, causing issues in their pressurised production area. They thought they would have to upgrade their ventilation system until they replaced two doors with Ulti Rolls. The improvement was so significant that they abandoned their ventilation upgrade, used the savings to buy a third Ulti Roll, and still came out ahead. However, they were left with three nearly useless doors that had already cost them money.

A purchase decision should consider not just the item but its impact on your entire operation.

 

Will You Have Regrets in 12 Months, or Will You Be Glad You Made This Decision?

While low prices may not matter as much for personal purchases, in business, short-term gains can lead to long-term pain. A well-made rapid door, for example, has an expected lifespan of 10 years. Consider whether buying cheap today will truly cost you less – or more – over the long run.

 

Poor Quality Costs, but Good Quality Pays.

 

 

This article was written by Russell Miller, Sales Consultant at Ulti Group.