The High Cost of Low Prices

The High Cost of Low Prices

While the bottom line price is important, knowing what you are going to get when your hotel furniture arrives is more important. And sometimes, what you get is what you paid for. Last year, Northland lost out on a bid for a local Oregon project when the customer decided to opt for the lowest price competitor bid. Almost a year later, we had a chance to learn how things turned out. And, it wasn’t pretty.

First, the lowest cost supplier in many cases is selling overseas product as was the case here. This comes with a host of risks. First and foremost, will the hotel be ready when delivery time comes? The furniture takes a long time to get to you and when it does, you get all of it, whether you’re ready or not. Construction delays? Don’t care. Sign here. In this case, the customer had to receive the product, even though they didn’t need it for another 6 months. So, for 6 months, the customer had to pay storage costs for a hotel’s worth of furniture. I’m no math major, but that sounds expensive. How much does that add to the bottom line?

Second, after sitting boxed in storage for 6 months, numerous items had hidden damage that was only discovered upon opening and had to be fixed! Rather than moving the furniture into the rooms and moving on to better things, the customer had to keep rooms out of rotation while the supplier sent people to fix what never should have been broken in the first place. Weeks of work were required. And even then, after installation was completed, there was more fixing to do. How much does that add to the bottom line not only in terms of costs, but stress and lost revenue?

These types of situations are all too common when purchasing decisions are based solely on the bottom line number. Hidden costs are real and they are expensive. Northland avoids that. We work with you. We can adjust our shipping schedule or even delay production to stay in line with your schedule. Being an American manufacture that actually makes product in the US, we have the ability to adapt and be flexible when you need it. Rather than spending an additional $20,000 to $50,000 on storage, repairs and lost room revenue, you get the furniture you need, when you need it.

When Northland Furniture delivers, our product comes blanket wrapped. When its unloaded off the truck, you can see, you can touch it and, if there is damage, you can make a note of it in real time. You won’t find out about it 6 months later when the truck is long gone and the supplier says, “Oh yeah. We’ll see about sending someone out”. What is the cost for these kind of surprises? Again, these are costs that weren’t factored into your budget. Did that low cost quote come with a line item for damaged goods?

Lastly, Northland builds your furniture to a 10 year manufacturer’s warranty. You can rest easier knowing that the price we give you is going to be the price you pay. Other vendors give you a price but then its costs more, and then it costs more again. And then you’ve spent $60,000 to $100,000 that wasn’t in the budget. If you want to get it right the first time, call Northland Furniture. We are American made hotel furniture. Designed for you. Built for you to Stay with you.

Contact us at [email protected]
www.northlandfurniture.com